Reforms in Centre-State Relations
Despite the various provisions made in the Indian Constitution for the smooth functioning of the Indian Union, it has faced many practical challenges. Most of these challenges orbit around the demand for greater autonomy.
In post-independent India, the need for planned development, national integration and maintenance of law and order led to a significant degree of centralisation of powers in the hands of the Centre. Long-term single-party government has also contributed to the Centre’s growing dominance of politics.
The working of the federal system in the last seven decades shows that centre-state relations have not always been cordial.
Till 1967, the Congress was in power both at the Centre and in most of the states; this phenomenon was described as the “Congress system” by Rajni Kothari. This level of political domination made sure of harmonious relations between states and the Centre. However, after 1967, the change in the political scenario marked a paradigm shift in centre-state relations.
Issues of Contention in Centre-state Relations
The issues that have been a bone of contention in centre-state relations are:
- Governor’s role:
- The Governor acts as the Centre’s agent and has often played a partisan role in Indian Polity.
- This is amplified by the fact that the Centre controls the appointment and removal of Governors.
- Reservation of state bills for the consideration of the President: The Governor’s right to reserve a bill for the President’s assent is another source of contention, as a governor usually reserves a bill against the advice of a state to serve the interest of the central government.
- Arbitrary imposition of President’s rule (Article 356) instead of using it as a last resort. For instance, When the Janata Government (in 1980) came into power at the Centre, it dismissed the congress government in nine states.
- Distribution of finances:
- The union government controls vast tax resources in terms of Income tax, Corporate tax, 50% of GST, Customs duties, etc. As a result, as per the 15th Finance Commission report, the Centre’s share in total tax resources in India is 62.7%.
- Only the Union government has full freedom to finance loans from the organised money market.
- The State often fails to mobilise their own resources, becoming dependent upon the Centre.
- Further, the Centre raises more than 25% of its revenue through cesses, which are not shared with states as “Net Proceeds”. Therefore, even though the 15th Finance Commission raised the State’s share to 41%, the effective allocation has stagnated between 29-32%.
- Encroachment of state list by the Centre: For example –
- 5 subjects, including Education, Forest, Administrative Justice, Weights and Measures, and Protection of Wildlife, were removed from the State list in the 42nd Constitutional Amendment
- Similarly, the Entry tax and Advertisement tax are now under the concurrent list after the introduction of GST.
- Deployment of armed forces in states for maintenance of law and order: The Union government deploys paramilitary forces without consulting the State’s government to preserve peace and order and occasionally even deploys forces against the preferences of the concerned State.
- The dominant role of non-constitutional and non-statutory bodies like the Niti Ayog in formulating schemes and approving state projects.
- Centre’s control over All India Services.
- Use of state broadcasting mediums for political purposes.
Demand for Reforms in centre-state relations
There have been various attempts in India to find a solution to the contentious issues in the Indian Federal system. The most important of these reforms are listed as follows:
Administrative Reforms Committee (1966)
To examine various issues in centre-state relations, the government appointed an administrative reforms commission under Morarji Desai. The Committee made the following recommendations:
- Establishment of Inter-state Council under Article 263 of the Constitution.
- Maximum delegation of powers to the Centre.
- During the appointment of the Governor, it should be ensured that the person should have a long experience in public life and administration and have a non-partisan attitude.
- Transfer of more resources to states in order to reduce their dependency on the Centre.
- Deployment of central armed forces in states on their request or otherwise.
No action was taken on the Committee’s recommendation.
Related FAQs of Reforms in Centre-State Relations
Reforms in Centre-State Relations are crucial to balance power between the Union and the States, address demands for greater autonomy, reduce conflicts, and ensure cooperative federalism for smooth governance in a diverse country like India.
The Sarkaria Commission (1983) was set up to review Centre-State Relations and recommend reforms for strengthening federalism in India. It suggested limiting misuse of Article 356, setting up an Inter-State Council, and better financial sharing between Centre and States.
The Punchhi Commission (2007) suggested reforms in the appointment and removal of Governors, equitable distribution of finances, setting up an Inter-State Trade and Commerce Commission, and providing guidelines to avoid misuse of President’s Rule under Article 356.
The Governor’s role is controversial because Governors are appointed by the Centre and sometimes act in a politically biased manner — reserving bills, dismissing state governments, or imposing President’s Rule, often against the state’s advice.
The GST Council, established under the 101st Constitutional Amendment, promotes cooperative federalism by involving both Centre and States in decision-making on tax policies. It works through consensus and has reduced friction over financial matters between the Centre and States.
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