Why this chapter matters for UPSC: Federalism is the single most tested GS2 topic. Centre-State relations, cooperative federalism, the Finance Commission, the role of the Governor, Inter-State Council, NITI Aayog, GST Council — all are rooted in the federal structure this chapter introduces. UPSC also regularly asks about linguistic reorganisation of states (States Reorganisation Act 1956), the holding together vs coming together federal distinction, and local government (73rd/74th Amendments).

Contemporary hook: India's federal tensions are live and growing — disputes over Governor's role in states ruled by opposition parties (Tamil Nadu, Kerala, West Bengal), fiscal federalism debates (states demanding larger devolution from divisible pool), GST Council as a new cooperative federal institution, and NITI Aayog replacing the Planning Commission (which was criticised as a centralising body). The 2026 delimitation exercise, which may reduce the representation of northern states (due to population growth) at the expense of southern states that performed better on population stabilisation, is shaping up as a major federal controversy.

PART 1 — Quick Reference Tables

Federal vs Unitary Systems

Feature Federal Unitary
Division of power Constitutionally divided between national and sub-national governments Power concentrated at national level; sub-units created/abolished by centre
Constitutional supremacy Written constitution; both levels derive power from constitution May be written or unwritten; legislature supreme
Rigidity Difficult to amend (especially federal features) Easier to amend
Independent judiciary Required to resolve Centre-State disputes Not necessarily
Examples India, USA, Australia, Germany, Canada UK, France, Japan, China

India's Federal Features: Core Table

Feature Constitutional Provision Key Point
Two-tier government (three after 73/74 Amendments) Articles 1–4 (Union and its territory); 245–263 (Union-State relations) States cannot secede; India is "indestructible Union of destructible States"
Written Constitution Preamble + 395 Articles + 12 Schedules (currently) Both levels draw authority from the Constitution
Division of powers Seventh Schedule: Union List (100 subjects), State List (61 subjects), Concurrent List (52 subjects) Centre prevails in case of conflict on Concurrent List
Independent Judiciary Articles 124–147 (Supreme Court); 214–237 (High Courts) Resolves Centre-State disputes; SC has original jurisdiction
Bicameralism Articles 79–122 (Parliament); Rajya Sabha represents states Rajya Sabha: representatives of states in Parliament
Rigidity Article 368 — amending federal provisions requires ratification by at least half of states Prevents unilateral Centre amendment of federal structure

Holding Together vs Coming Together Federations

Type Meaning Examples
Coming together Independent states come together to form a federation, giving up some sovereignty USA (1787), Switzerland, Australia
Holding together A large country decides to divide power among constituent units to accommodate diversity India, Spain, Belgium
India's type Holding together federation States have less autonomy than USA states; Centre is stronger

Major Features of Indian Federalism

Feature Detail
Stronger Centre More subjects in Union List; residuary powers with Centre; Parliament can change state boundaries (Article 3); Emergency provisions concentrate power at Centre
No equal representation of states in RS Rajya Sabha seats are proportional to state population (unlike US Senate where each state gets 2 seats regardless of size)
Single Constitution Unlike USA where states have their own constitutions; India has one Constitution for the Union and all states
Single citizenship All Indians are citizens of India, not of states
Flexibility Centre can take over state functions in national interest; President's Rule (Article 356)

PART 2 — Detailed Notes

Why Federalism for India?

India's adoption of federalism was driven by:

  1. Enormous size and diversity: 1.4 billion people, 29 states, 8 UTs, hundreds of languages, multiple religions
  2. Administrative efficiency: Decentralised management of such diversity is more efficient
  3. Democratic legitimacy: State governments can respond to local needs better than a distant central government
  4. Accommodating regional aspirations: Different regions had distinct political cultures, languages, and economic interests
Key Term

Federalism: A system of government in which power is divided and shared between a national (central) government and several regional (state/provincial) governments, both drawing their authority from a written constitution and each being supreme within its assigned domain.

Linguistic Reorganisation of States

India's states were originally organised on the basis of administrative and historical convenience under British rule — languages were not the primary criterion. After independence, linguistic communities demanded states where their language was official:

  • Andhra agitation: Potti Sriramulu fasted unto death (56 days) in 1952 for a Telugu-speaking state. His death triggered widespread agitation; Prime Minister Nehru reluctantly agreed
  • State of Andhra: Created 1 October 1953 — India's first linguistic state carved from Madras State
  • States Reorganisation Commission (Fazl Ali Commission, 1953): Recommended reorganisation of states on linguistic basis
  • States Reorganisation Act, 1956: Reorganised India's states along linguistic lines; created 14 states and 6 union territories; is the foundational document of India's linguistic federalism

This did not end reorganisation:

  • Bombay split into Gujarat and Maharashtra (1960)
  • Punjab split into Punjab (Punjabi-speaking, Sikh majority), Haryana (Hindi-speaking), and Himachal Pradesh (hilly areas) in 1966
  • Newer states: Chhattisgarh, Jharkhand, Uttarakhand (2000); Telangana (2014)

Language Policy

The Constitution's language policy attempted to balance multiple interests:

  • Official Language: Hindi in Devanagari script designated as the official language of the Union (Article 343), to be progressively promoted
  • English continuation: English was to continue for 15 years after commencement (until 1965); but the Official Languages Act 1963 allowed indefinite continuation of English as an associate official language
  • Anti-Hindi agitations (1965): Massive protests in Tamil Nadu against making Hindi the sole official language after 1965; people died. Result: English remained as associate official language
  • Three-Language Formula: Students learn their regional language, Hindi, and English — a compromise

This is why India does not have a single national language — it has 22 scheduled languages (8th Schedule), with English and Hindi as official languages for Union government purposes.

Centre-State Relations

The NCERT chapter covers the institutional mechanisms of Centre-State relations:

Finance Commission (Article 280):

  • Constitutional body appointed every 5 years
  • Recommends: (a) share of states in central taxes; (b) grants-in-aid to states
  • 15th Finance Commission (2021–26): Devolution of 41% of central taxes to states
  • UPSC regularly tests Finance Commission numbers and constitutional basis

Inter-State Council (Article 263):

  • Can be established by the President for inter-state coordination
  • Currently exists; meetings not held regularly; Sarkaria Commission (1988) and Punchhi Commission (2010) recommended more active use

NITI Aayog (replaced Planning Commission 2015):

  • Not a constitutional body; set up by Cabinet resolution
  • Coordinates Centre-State economic planning; includes CM of all states and Lt. Governors of UTs
UPSC Connect

Cooperative vs Competitive Federalism:

The traditional model of Indian federalism was "marble cake" or cooperative — Centre and states worked together on shared goals (Five-Year Plans, poverty alleviation). The post-1991 liberalisation era introduced "competitive federalism" — states competing for investment, talent, and economic activity by improving governance and business environment.

NITI Aayog's ranking indices (State Health Index, SDG Index, DPIIT Investment Attractiveness Index) formalise competitive federalism — states are assessed and ranked, creating peer pressure for better performance.

The GST Council (2017) is the best example of cooperative federalism: a joint Centre-State body where all states and the Centre collectively set tax rates, with decisions by majority (Centre has 1/3 votes; states collectively have 2/3 votes).

Decentralisation: 73rd and 74th Amendments (1992)

The most important expansion of Indian federalism after 1950:

73rd Constitutional Amendment (1992):

  • Added Part IX and 11th Schedule to the Constitution
  • Created constitutional basis for Panchayati Raj (rural local government)
  • Mandated 3-tier structure: Gram Panchayat (village) → Panchayat Samiti (intermediate/block) → Zila Parishad (district)
  • Mandated elections every 5 years
  • Mandated 1/3 reservation of seats for women (some states raised to 50%)
  • Mandated reservations for SCs and STs in proportion to population
  • Mandated State Election Commissions and State Finance Commissions

74th Constitutional Amendment (1992):

  • Added Part IX-A and 12th Schedule
  • Created constitutional basis for Urban Local Bodies (municipalities, municipal corporations, Nagar Panchayats)
  • Same principles: elections, reservations, devolution
Key Term

Panchayati Raj Institutions (PRIs): The three-tier system of rural local governance created by the 73rd Amendment — gram panchayat (village level), panchayat samiti (block level), and zila parishad (district level). Constitutionally mandated since 1992.

PART 3 — Frameworks & Analysis

India's Federalism: Stronger Centre — Key Reasons

India's federal structure is notably Centre-dominant compared to the USA or Australia:

  1. Historical context: Partition and integration of 562 princely states required a strong Centre
  2. National security: Defence, foreign affairs, and security concentrated at Centre
  3. Economic development: The Planning Commission model assumed national planning requires central direction
  4. Emergency powers: Articles 352 (National Emergency), 356 (President's Rule), 360 (Financial Emergency) allow the Centre to override state governments
  5. Article 3: Parliament can change state boundaries without state consent (only consultation required)

The Sarkaria and Punchhi Commissions

Both Commissions examined Centre-State relations and recommended reforms toward greater state autonomy:

Commission Year Key Recommendations
Sarkaria Commission 1983–88 Use Article 356 sparingly; Inter-State Council should be activated; Governor should be neutral; residuary power sharing
Punchhi Commission 2007–10 Role of Governor should be curtailed; Governor should not be removed at Centre's will; Inter-State Council should be permanent secretariat; fiscal autonomy for states

Both Commissions' recommendations are standard UPSC material.

Exam Strategy

Prelims fact traps:

  • First linguistic state: Andhra Pradesh (1953, carved from Madras)
  • States Reorganisation Act: 1956 (Fazl Ali Commission report)
  • 73rd Amendment: 1992 — Panchayati Raj (rural)
  • 74th Amendment: 1992 — Urban Local Bodies
  • Residuary powers: With the Centre (unlike USA where residuary powers are with states)
  • Rajya Sabha: NOT equal representation of states (unlike US Senate)

Mains question patterns:

  1. "India's federalism is strongly tilted towards the Centre. Examine the reasons and assess whether this is appropriate for India." (GS2)
  2. "The 73rd and 74th Amendments were India's most significant decentralisation reform. Critically assess their implementation." (GS2)
  3. "Cooperative federalism requires both institutional mechanisms and political will. Examine in the context of GST Council and NITI Aayog." (GS2)

Previous Year Questions

  1. Discuss the factors contributing to the strength of the Centre in India's federal system. Is this strength appropriate for a diverse democracy? (UPSC Mains GS2)
  2. Critically examine the role of the Governor in Centre-State relations in India. (UPSC Mains GS2, frequently tested)
  3. "The GST Council represents a new model of cooperative federalism in India." Examine. (UPSC Mains GS2, 2019 type)
  4. Assess the progress of Panchayati Raj institutions in India since the 73rd Constitutional Amendment. What challenges remain? (UPSC Mains GS2)