AS FEDERAL?

847
CAN THE IÎNDIAN CONSTITUTION BE CHARACTERISED

BE CHARACTERISED
H. CAN THE INDIAN CONSTITUTION
AS FEDERAL?

An academic question and again is whether

raised timescholars the Indian Constitution can

federal. Some hesitate to corisider the Indian Constitu-

be characterised as
and they use such epithets for it as "quasi-federal"', 'unitary
tion as 'tuly' federal According to WHEARE,the
with federal features' *federal with unitary features."" federal"."
or
WHEARE'S view
and not 'strictly
Constitution of India is 'quasi-federal,"
that the general and regional governments should each,
is that federalism involves and 'independent."JENNINGS has
characterised it
within a sphere, be 'co-ordinate scholars, however, ac-
a strong centralizing tendency." A few
as a federation with it co-operative federation.
a federal constitution." Austin describes
as a
cept it as
of the Supreme
has the judiciary characterised the Constitution? The attitude two-fold. In
How of the Constitution has been rather
Court towards the federal portion have been of
and an individual (and most of the
cases
contests between a government to the govern-
an expansive interpretation
this type), the Court has invanably given the Central or the State Government) and has
ment's legislatiye power (whether of State, the
law."" On the other hand, in contests between the Centre anda
upheld the for a strong Centre and has, consequently,
court has shown its strong predilection
of the Constitution.
underplayed the federal aspects claims of the States regard-
TheCourt this strategy to counter the exaggerated
adopted in West Bengal
.
status and
powers vis-a-vis the Centre. For instance,
ing their position, Court projected thre traditional view of federalism and characterised
India, the Supreme as to any traditional pattem
of federation." The
not being "true
the Indian Constitution
the State claim for sovereignty and applying the doctrine of im-
Court said so to counter and against the Centre. The
to the fullest extent in their favour
munity of
instrumentalities
the validity of the im-
reached the same result, e.g., upholding
Court could have possibly balanced view of federalism as explained
Act by taking the prevailing the States
pugned Central
RAO, J., in his bid to bolster the position offederalismn
below. On the other hand, SUBBA and dual
Centre, took recourse to the extreme view of competitive
against the discarded in the older federations.
which has long been to judge the Indian
BEG, C.J., soughtnot
In State of Rajasthan v. Union of India," WHEARE (which is generally accepted
d federalism by the yardstick propounded by federal," and having
the Constitution as "more unitary than
characterised
now) and federal structure. He also went
on to say:"
S the 'appearances of a extent of federalism
in
therefore, the Indian Union is federal. But, the of a country
"In a sense, the needs of progress and
development
it is largely watered down by and economically co-ordinatea,
politically
which has to be nationally integrated,
d and intellectually, and spiritually uplifted."
socially,

Bar Councl o
1S 75. Supra, Ch 1, Sec. E(1).
REALITY AND THE MYTH,
(1974) Jl.
P.K. TRIPATHI, FEDERALISM, THE
AIso see,
India, 251.
GOVERNMENT, 27-8 (1964); 48 All LU 21.
76. WHEARE, FEDERAL 33. WHEARE, MODERN GOVERNMENT,
18 (971).
77. WHEARE, ibid., 10,
18. SOME CHARACTERISTICS OF THE DIAN CONSTITUTION, LJ 639; ALEXANDROWICZ, CONSTO
DNA

79. NiCHOLAS, The Constitution

of India, 23 Australian COMM. SERIES,
74 (I9049
GLEDHILL, REPUBLIC OF INDIA,
DEVELOPMENTS IN INDIA, I55-70; NATION, 187
80. THE INDIAN CONSTITUTION-CORNERSTONE OFA
81. Supra, Ch X, Sec. G(i).
82. Supra, Ch. XI, Sec. J(ii d).
83. Supra, Ch. XIll, Secs. C & D.
Also see, Ch. IV, Sec. C(iii)(b).
30A AIR 1977 SC at 1382:(1997)3 SCC 592.
 848 PARTIVCHAP.XIV-Co-oPRRATIVH PEDERALASM
These observations were made to justify the cxercise of Central powers under An
And, again, in Karmataka v. Union ofIndlia, BEG, C.J., said: "Our Constitution
has, despite whatever federalism may be found in its structure, so strongly unitary fea
tures also in it..." This argument was adopted to counter the State argurnent that insti-
huting inquiries by the Centre into the conduct of State ministers violated the federal
principle,
In Bormai,' several Judges have characterised the Indian Federalism in different
ways. The case concemed the exercise of the power of the Central Govermment under
Art. 356. AHMADI, J., described the Indian Constitution, following K.C. WHEARE,a
"quasi-fedcral" because "it is a mixture of the federal and unitary elements, leaning
more towards the latter". But other Judges have expressed a more balanced view
Thus, SAWANT, J., has observed:"
"Democracy and federalism are essential features of our Constitution and are part
of its basic structure."
JEEVAN REDDY, J., has observed:
The fact that under the scheme of our Constitution, greater power is conferred
upon the Centre vis-a-vis the States do not mean that States are mereappendages of
the Centre. Withinthe sphere aliotted to them, States are supreme. The Centre can-
not tamper with their powers. More particularly, the courts should not adopt an ap
proach, an interpretation, which has the effect of or tends to have the effect of
whittling down the power reserved to the States."
Federalism in India 'is not a matter of administrative convenience, but one of principle".
Accordingy, as already discussed earlier, in Bommai, the Supreme Court has
veloped a more balanced approach to Art. 356.°
II is, therefore, worthwhile to consider the nature of the Indian Constitution vis-a-vis
the other federal constitutions and to see how far the views expressed above are justified.

usa The U.S. Constitutionhas been regarded as the epitome of the classicalfederalism
America started on its federal career with a weak Centre and an accent on States
nghts. The reason was that the U.S. Constitution came into being as a result of a vol
untary compact among the pre-existing States which conceded rather limited powers
to the Centre. Naturally, the Centre borm of such a historical process could only get
limited powers. A similar process occured in Australia. Also, the U.S. Constitution
was the product of the laissez faire era which Signified minimum govermment and
maximum private enerprise. In course of time, however, things have changed. The
powers of the Centre have expanded phenomenally since 1787 and eorrespondingly
the
powers of the States have shrunk. This has been
achieved without any explicit
amendment of the Constitution but through ingenious legislative devices and judicial
tolerance thereof and also through judicial activism.
The courts have interpreted the constiutional provisions liberally in favour of the
Centre. The judicial activismin the USA has playeda sterling role in the expansion of the
Centre's powers over time. The courts through their liberal interpretation ofthe Constitu-
tion have helped in substanial extension ofthe legislative power into fields which were
oniginally regarded as belonging to the States. The courts have played the significant role
as the balance wheel for harmonious adjustment of Centre-State relations.

Supra, Ch. XII, Sec. C.

S.R Bommai v. Union of India, AlR 1994 SC 1918: (1994) 3 SCC 1.
3. Ibid., 1951.
4. Ibld, 1977.
5. Ibid, 2053.
6. Supra, Ch. XII1, Sec. D.

203
 FEDERAL? 849
CAN THB ÎNDIAN CONSTITUTION HR CHARACTERISED AS

The Centre's vast financial resources have led to the cinergcncc of the system of
the Centre has become very
grants-in-aid; centripetal forces have been generated and in the U.S.A. arc co
powerful. Today it can not plausibly be asserted that theis Statcs weakcr vis-a-vis
ordinate with the Central Govemment as their position asdefinitcly
tense international situa-
the Centre. The process has bccn aided by such factors
tion, wars, Vast economic and technological developments, replacement of the laissez
faire by the social welfare era, ctc.
This trend may be strikingly illustrated by referring to an interesting case. AS a re-
sult of the Depression duning the 30's, the U.S. Governnent desired to introduce a
scheme of unemployment compensation. The U.S. Constitution confers no legislative
power on the Centre for the purpose. What the Centre, thercfore, did was to impose a
tax on the pay rolls of the employers, granting a credit up to 90% if a State imposed a
similar tax, provision was also made for grants to the States for assisting them to ad-
minister the scheme of unemployment compensation. The fund to be collected by the
States was to be used for affording unemployment compensation. Th Centre, thus,
placed enormous economic pressure on the States to adopt the scheme.
Thetruth is that overtime there has been a continuous expansion of the functional
role of the Federal Govemment. This has completely altered the balance of powers in
favour of the Central Govemment. No longer can it be asserted that the States have a
coordinate status with the Centre. It is the Central Government which play a domi
nant role in the govemance of the country so much so that a constitutional scholar
has suggested that the "surge" in the USA is towards 'organic federalism' "similar to
the surge towards cooperative federalism" of the late I930s". He characterises 'or-
ganic federalism' as "federalism in which the Centre has such extensive powers, and
gives such a strong lead to Regions in the mostimportant areas of their individual as
well as their cooperative activitis, that the political taxonomist may hesitate to de-
scribe the result as federal at all."
The Canadian Consitution, to start with, definitely laid an accent on the Centre. In Canada
course of tüme, however, the Pnvy Council, by its process of interpretation weakened
the Centre and exalted the Provinces." This was the result of the assertion of bilin-
guism and bi-culturism by Quebec-a French majority Province. The Central power
to veto provincial legislation has also come to be used
sparingly as a result of
of conventions. On the whole, therefore, the Provinces in Canada have greater growth
free-
dom of action than the units in other Federations, and this has at times been incon-
venient and embarrassing to the Centre, primarily in the area of
economic matters. foreign
relations and
During the war, however, the Centre acquires vast powers as a result of a liberal
interpretation of the general clause. A system ot conditional grants-in-aid is now
emerging and other expedients of Central-Provincial collaboration are being created.
Frequent Central-Provincial Conferences are held to discuss issues
relations inter se. In the wake of the demise of the laissez pertaining to their
Central Govemment have been faire era, the powers of the
strengthened.
1940, the Centre was given power to provide By a constitutional
amendment in
old age pension wasS made a unemployment insurance; and, in 1950,
subject of concurrent jurisdiction.
The Australian Constitution although
as in the characterised
beginning the Centre's powers were linitedjudicially
as a true
federation,
and the accent was on the
States, has, in course of time, undergone à significant
towards centralization. The Centre has become metamarphosis and has moved
very powertul as a result of the proc-
Australia
7. Supra, Ch. XI, Secs. K{b); M.
8. Steward Machine
Co. v. Davis,
9. SAWER, MODERN FEDERALSM, 301 US S48 (1937); Also, tHelvering Davis, 301
v.
125-126. US 619 (1937).
10. Supra, Ch. X, Sec. L
 850 PARTIV-CHAP. XIV-Co-oPERATIVE FeDERALISM
css of judicial interpretation
of its powers," conditional
grants to the deficit States grants-in-aid, fiscal need
the recommendation of the Grants
on
emergence of the financial agreement amongst the Centre and the StatesCommission,2
under which
the Centre has assumed extensive
financial powers. Borrowing powers of the States
are contro!led through the Loan Council."
The enomous Central power was manifested in 1942 when the Centre
excluded the States, without their çpnsent, from the field of income-tax. unilaterally
Under the
Constitution, both can levy tho tax." During the war, the Centre desired the States to
vacate the f+eld in lieu of grants. The States did not
agree. Thereupon, the Centre
passed a number of statutes imposing a very high rate of income-tax (18 s. in the £);
Central tax dues were given a priority over State taxes; grants were to be given to
those States which desisted from levying the income-tax; and the Centre
requisi-
tioned the State income-tax stff. The States found it impossible to levy the tax and
so they had to vacate the field." The war-time scheme has now
become a permanent
featurein Austraila and has been judicially sanctioned in peace-time." After the de
mise of laisser faire era, the powers ofthe Centre increased because of the néeds to
provide social welfare to the people. For example, in the Phamaceutical Benefits
case,a Central scheme to provide free pharmaceutical benefits to the people was
judicially invalidated. This led to the amendiment of the Constitution empowering
Parliament to provide a number of social services to the people.
From the above brief description of the developments in the three federations, it
becomes clear that the glassical concept of a federation envisaging two parallel gov
ermments of coordinate jurisdiction, operating in water-tight compartments is no-
where a functional reality now. There. is no fixed, static or immutable format of a
federal constitution. Each country adapts and moulds the federal idea to its peculiar
circumstances, conditions and needs.
It is thus clear from the above discussion that all the older federations have also ex-
hibited centralising and centripetal tendencies and the constituent units do not enjoy a
co-equal status with the Centre. In each of these federations, in course of time, the
Centre has assumed a very dominant position. During the last several decades, an in-
evitable trend the world over has been the strengthening of the Central Govemment.
Undoubtedly the accent of the Indian Constitution is on the Centre which has been
made more powerful vis-a-vis the States. This has been done for some very good in-
digenous reasons.
First, there is the historical background. In India, the historical process to create the
federal system was different from what happened in the other federations as stated
above. For long, before 1935, British-India had been administered on a unitary basis.
There existed a unitary system. In 1935, the unitary system was replaced by a federal
system. The present federal system was built on the foundation of the 1935 system. It
was therefore inevitable that because of its lineage the federal system hada unitary
bias.
The Indian federalism was not a result of a compact between several sovereign
units but a result of conversion of a unitary system into a federal system. Here the
movement has been from unity to union, from unitarism to federalism, unlike other

11. lbid.
Secs. M; K(b).
12. Supra, Ch. XI, Sec.
Supra, Ch. XI, N.
13.
14. Supra, Ch. XI, Sec. I.
15. South Australia v. The Commonwealth, 65 CLR 373 (1942).
575 (1957).
16. Victoria and New South Wales v. The Commonwealth, 99 CLR
Victoria The Commonwealth, 71 CLR 223.
17.Artorney General for v.
 CAN THE INDIAN CONSTITUTION DE CHARACTERISED AS FeDERAL? 851

countries where the histprical process has been for separate units to come together to
fom the federal union." In India, it was rather the reverso process, viz. to convert a
unitary Constitution into a federal Constitution. In West Bengal v. Unlon of India, the
Supreme Court took note of this proçess and rejected the clain of the States that they
sharcd sovereignty with the Centre.
Sccondly,the past history of India conclusively cstablishes that in the absence of a
strong Central Govemment, the country soon disintegrates. This belief was strength-
ened by the recent partition of the country. Therefore, adequate precautions have to
be taken against any such future contingency by making the Centre strong. Owing to
its vastness of temtory and variety of people, India could not be governed efficiently
as a unitary state and so a unitary Constitution was out of question. The second best
alternative, therefore, before the framers of the Constitution was to adopt the federal
principle with a strong Centre. Their approach was not theoretical or that of constitu-
tional puntanism but pragmatic and was conditioned by considerations of unity and
welfare of the country as the guiding objectives. India had already undergone one
partition on the eve of the Constitution-making and its memories were very fresh in
their minds and, therefore, they put a great stress on promoting unity in the country so as
to ensure that fissiparous tendencies were kept in check.
In this connection, the following observation of the Sarkaria Commission may be
taken note of:*"
"The primary lesson of India's history is that, in this vast country, only that pol
ity or system can endure and protect its unity, integrity and sovereignty against ex-
ternal aggression and internal disruption, which ensures a strong Centre with para-
mount powers, accommodating, at the same time, its traditional diversities. This les-
son of history did not go unnoticed by the framers of the Constitution. Being aware
that, norwithstanding the common cultural heitage without political cohesion. the
country would disintegrate under the pressure of fissiparous forces they accorded the
highest priority to the ensurance of the unity and integrity of the country".
Thirdly, being an underdeveloped country, India had to force the pace of economic
development in order to compress into decades the progress of the centuries. This
could be achieved by mobilising and judiciously using the national resources and this
could be done best only under Central direction and leadership.
Lastly, a common feature of aH the modem federations is an accent on the Centre.
As discussed above, such countries as Australia and America, which started on their
federal career with an emphasis on the States, with the Centre having been assigneda
limited role, have seen the transformation of the Centre becoming very powerfuland
the States having relatively gone down. Need has been felt in these federations for a

strong Centre so that the defence, and complex socio-economic problems o an

dustrialised society, may be tackled effectively. Each of the three federations
to make
varying degrees, has exhibited this tendency, and this provides a justification
the Centre strong in India.
been a continuous expansion of the functional role of Central Gov
the
1hert has
ernnent. Such expansion has çompletely altered the federal balance of powersauen
took
Tavour of the national govermment, The framers of the Indian Constitution

ary
British India formed completciy
a
0.nu he
passage of the Government of lndia Act. 1935.
8overament and the Provinces derived their powers from the en eally function. Because of
then provided for a federal structure, but this part of the Act ad ather han a federal State. So
the Second World War, India was governed more as au rccess has been one or lng8 tion&
y
ar as the
pre-Consitution princely SLates are concerned, tne po
agrecment: Supra, Ch I.
19. Supra, note 82.
20. REPORT, 1.
 852 PARTIV-CHAP. XTV-ÇO-OPERATIVE FEDERALISM
note of these changing concepts and functional realities in other federations.
consciously designed the federal portion of the Indian Constitution Thev
with a strong
partly because of the experiences of Centre
needs of the country, viz., security the other
federal systems and partly because of
and development. the
The framers did not adopt a
classical federalism but adopted doctrinaire approach based on the out-modéd concept of
a functional
with the peculiar needs, traditions and approach and devised a system in tune
ism is a sui generis system. In devisingaspirations
of the Indian peopBe. Indian
the federal system, the framers of the federal.
tion sought to ensure its vitality as well as its Constitu-
dynamic society. adaptability to the changing needs of a

Merely because the Centre enjoys predominance over the States to some extent, the
Indian Constitution does not cease to be federal. Federal form of government has no
fixed connotation. No two federal constitutions are alke. Each federal
has its own distinct character. Each is the culmination of certain historicalgovemment
One basic feature of each federation however is that there is a division of processes.
between the Centre and the regional units by the Constitution powers
itself. If the essence of
federalism is the existence of units and a Centre, with a division of functions between
them by the sanction of the Constitution, then these elements are
normal times, the States in India have a large amount of autonomý and
present in India. In
of action. The Indian federal scheme seeks to reconcile the independence
Centre with the need for State autonomy.
imperatives of a strong

The States have substantial legislative powers and have control over most of the na-
tion-building activities." They have a full-fledged parliamentary fom of govemment22
At no time are they regarded as delegates or agents of the Centre. They subsist not at the
sufferance ofthe Centre but derive their sanction and powers from the same Constitution
from which the Centre draws its sanction and powers. In course of time, many conven-
tions have been evolved making the States more autonomous in practice than what it
looks to be in theory. An independent judiciary acts as an umpire between the Centre and
the States. The process of amending the Constitution is not unilateral so far as the federal
portion is concened, and at least half the States must agree before a proposed amend-
ment can become effective."
Within the sphere assigned to the States by the Constitution, the State Legislatures have
plenary power. No fetter or limitation can be read on the legislative power of a State
Legislature outside the Constitution." The States have independent and substantial in favour
sources of revenue:" they have executive power in the exclusive field (List I) and in the of
Concurrent field.° On the whole, the Indian Union is never so closely knit as a unitary federalism
polity, nor, itis so loose as a confederation.
What are the provisions in the Constitution iwhich are supposed to go against the
principle of federalism? Parliament has power to re-organise the States but here also
the States are to be consulted and, further, India being a Union of States, the States against
have to exist as component units. The existence of several inter-State boundary dis
putes for long, as between Mysore and Maharashtra, or Punjab and Haryana, prove that

21. Supra, Ch. X, Secs. E andR.

22. Supra, Chs. V and VII.
23. Infra, Ch. XLI.
24. The State Legislature's competence to legislate on an entry in List Il is plenary and it cannotDE
Cumscrioeay assurances given by the govermment: Umeg v. Bombay, AIR 1955 SC S40
(1955) 2 SCR 164: Stase of Kerala v Gwalior Rayon Silk Mfg. Co.s,AIR 1973 SC 2134 : (1913)
SCC 713; supra, Ch II, Sec. M.
25. Supra, Cb, X Sec. D.
26. Supra, Ch. XII,
27, Supra, Ch. V.
Sec. A.
205
 CAN THE INDIAN CONSTITUTION BE CHARACTERISED AS FeDERAL? 853
Parliament does not act unilaterally in such matters but only after consensus has been
reached between the contending parties themselves. In actual practice, today, the power
to re-organise the States is proving to be a source of embarrassment rather than of
strength to the Central Govemment. Then, there is the provision relating to the ap
pointment of the Govemor by the Centre. But here a convention has grown to consult
the State Chief Minister.
There are the provisions in the Constitution requiring in some cases Central assent to
State legislation. But whatever the letter of the Constitution, in practice, by and large,
Central assent is accorded to State legislation as a formality and there are not many
instances of the Centre vetoing the State legislation. The one conspicuous example of
this has been that of the Kerala Education Bill, over which public sentiment in the State
ran high, but here also the Centre obtained the advisory opinion of the Supreme Court
iting it back to the State Legislature for suitable amendments in the light of
the Court's opinion."
The Central financial support to the States, as already pointed out, is provided largely
under the Constitution and through the Finance Commission, an independent body, and
this does not compromise State autonomy. The aid given by the Centre to the States
for fulfilment of the plans is on the advice of the Planning Commis_ion, and the Na-
tional Development Council in which all the States are represented."" Further, provi-
sion of Federal grants-in-aid to the units is now a common feature of every federation
and India is no exception to this trend.
The emergency provisions of the Constitution have at times been held as consti-
tuting a major deviation from pure federalism." These provisions are designed for
temporary use only; by their very nature they cannot beof normal occurrence. Art.
352 is to be invoked only when its need is demonstrable, and this is much more so
now after the 44th Amendment. Further, in an emergency, the behaviour of each fed-
eral Constitution is very different from that in peace-time.
Art. 356, as has already been discussed," is meant to be used only when constitu-
tional machinery is not functioning properly in a State, and that is an exceptional, not
a normal, situation. It may be hoped that with the passage of time people will get the
necessary training, outlook and discipline to work democratic institutions, and then
the States will have stable Ministries and the provision will fall into desuetude. In
Bommai," the Supreme Court has now spelled out a few restrictions on the invoca-
tion of Art. 356. Further, the composition of the two Houses presently is such, that it
is not possible to invoke Art. 356 in relation to a State unless there is national con-
sensus to do so." On the whole, the Central power has weakened in this
respect.
Under Art. 252, which introduces a kind of flexibility in the distribution of
the States come into.picture as the Centre cannot take over the State matter powers,
without
their co-operation and initiative." Only under Art. 249, the Centre acts
unilaterally,

28. Supra, Ch. VII, Sec. A(i).

29. AIR 1958 SC 956: 1959 SCR 995; Supra, Ch. V, Sec. F(c).
30. Supra, Ch. XI, Sec. L.
31. Supra, Sec. G, this Chapter.
32. Supra, Ch, X1, Secs. K(i) and (ii); M.
33. Supra, Ch. XITI, Secs. A and B.
34. 1bia.
35. Supra, Ch. X, Sec. L
36. Supra, Ch. XIII, Sec. D.
37. Supra, Ch. XIII, Sec. E(b).
38. Supra, Ch. II.
39. Supra, Ch. X, Sec. J(¢).
854 PARTIV-CHAP. XTV-Co-oPERATIVE FEDERALISM.
40
but it is for an extremely short period and in national interest," and if the theory that
the Rajya Sabha represents the States is tenable," then even in this case it can be said
that the States consent is there, if not directly at least indirectly. In any case, so far,
this provision has been used very sparingly.
The States Re-organisation Commission has put the matter in the right perspective.
"These special provisions", observes the Commission, "however, are primarily re
medial in character and are meant to prevent a breakdown in the States and to safe
guard the powers of the Union within its own sphere. They do not detract from the
fact that under the Constitution the States constitute corner-stones of the political and
administrative structure of the country with a real measure of autonomy."**
As regards the Centre-State administrative relationship, it has already been pointed
out that the Centre depends too much on the States for administrative purposes.
The Constitution introduces mechanism for intergovernmental cooperation. Many
more bodies have emerged for this purpose through legislation and administrative
orders and practices.
It may also not be out of place to mention here that a good deal of what is explic-
itly stated in the Indian Constitution in the area,of the Centre-State relations is found
to be implicit in other federal constitutions. For example, the mechanism of condi
tional grants mentioned in Art. 282 has come into vogue in all federations although
not stated explicitly in the constitutions.In the U.S.A. and Australia, the system is
based on the Centre's spending. power. The concept of emergency is expressly
mentioned in the Indian Constitution in Art. 352. By and large, the same effect is
achieved in the USA and Australia under their war power and in Canada under the
eneral power. Art. 355 has its parallel in the USA in Art. IV, Sec. IV."
Thus, considering the whole of the constitutional process-not only the letter of
the Constitution but the practices and conventions that have grown thereunder-the
Indian Constitution can justifiably be called federal. It is not necessary to use such an
against
inarticulate term as 'quasi-federal' to characterise it. The term 'quasi-federal' is ex quasi
tremely vague as it does not denote how powerful the Centre is, how much deviation
federal
there is from the pure federal model, or what kind of special position a particular concept
quasi-federation occupies between a unitary State and a federation proper?
The fundamental principle of federalism is that the legislative and executive
authority is partitioned between the Centre and the States not by means of an ordi
nary Jaw passed by the Centre,but by something more enduring, viz., the Constitu-
tion.4 That is what the Indian Constitution does. The States do not depend upon the
Centre, for in normal times, the Centre cannót intrude in their domain. It may be that
the Centre has been assigned a'larger role than the States, 'but that by itself does not
detract from the federal nature of the Constitution, for it is not the essence of feder
alism to say that only so much, and no more, power is to be given to the Centre.
There is also no immutable line of demarcation in any other federation between the

40. Supra; Ch. X, Sec. J(a).

41. Supra, Ch. II, Sec. B.
42. REPORT, 42.
43. Supra, Ch. XI1
44. Supra, Ch. XI, Sec. M.
45. Supra, Chs. X, Sec. L and XIII, Sec. A.
46. Supra, Ch. XlI1, Sec. C.
47. SAWER, MODERN FEDERALISM, 127, suggests that the most important feature of federalism "is the
creation of an area of guaranteed autonomy of each unit of the system. Since the secular trend is to-
the federalism or
of authority of the Centre, the question of no federalism becomes in
wards increasethe
practice whether area of autonomy is sufficient to be worth
tee is sufficiently elfective."
considering and whether the guaran
20-
 CAN THE INDIAN CONSTUnON BR CHARACTERISRD AS FeDERAL? 855

Centre and the States, and the balance of power has always been shifting in favour of
the Centre as has ben pointed out above.
1he concept of 'dual federalism', viz., that, in a federation,
the general and re
gional governments arethe"co-ordinate and independent' and competitors for power, is
based on a reading of 18th century vesion of the U.S. Constitution. In its opera-
in Similar is
tion today, this Constitution is very different from what it was the past.
the case in Australia. The truth is that the old orthodox theory of
"dual federalism', as
does not accond with contemporary realities and is no
propounded by WHEARE difficult to sustain the argufnent, in the light
longer tenable or viable." It is extremely
of the evolution of the so-called true fedcral constitutions, that federalism
must nec-

essanily accord with a fixed, standard or immutable mould.

There is nothing static about the federal concept. Today there is no country which
may besaid to have pure' federalism in the sense of there being a complete dichot-
omy o unctions,
States. a complete ascquality
or federations,
In fact, in all
of status, between the Centre and the
pointed out above, the modern accent is on "co
between the Centre and the States, rather than on 'independence' of
the
operation,And for successful working of a 'co-operative federalism, it is necessary
States.
that the Central Govemment be in a position to provide leadership to the regiOnal
governments, to co-ordinate their activities, to guide them, to help them and, per
them to act in a particular direction if the na-
haps, on occasions to pressunize
tional interest so demands.
AD appraisal of the whole constitutional process including the latest develop-
ments in the field of Federal-State financial relations in the U.S.A., Australia and
and
Canada, will make it clear that each of these countries is Centre-oriented today,
the centre of gravity has definitely moved in favour of the Centre. So is the case in
India. Although the accent on the Centre appears to be more pronounced, yet this is
mainly because, being the latest member of the federal family, much of what happens
elsewhere underneath the surface of the Constitution, has been explicitly incorpo
rated in its fabric. It may, however, be noted that the centralising trends in other fed
erations have not yet ceased or been contained; they continue to operate and are
bound to change the constitutional complexion further in course of time.
In India itsef, apart from the constitutional provisions the centralising tendencies
were also accentuated by the fact that one national party held sway both at the Centre
and in the States.But now the State Governments belong to different political parties.
The monopoly of power by the Congress Party was broken in 1967 and this has be
the
come accentuated since then. This development has thrown an apple of discord in
Central-State relationship.
Within the last few years, a significant change has occured in the complexion of
the Central Govermment itself. The Central Govemment to-day is not constututed by a
single all India political party;, it is now a coalition of several political parties

48. WHEARE, MODERN GoVERNMENT, 18 (1971).

As SCHWAKTZ poinis out, the doctrine of dual federalism was based upon the uoion of two muually
excusive, ecprocaly liniting, ficlds of power, the govemmental occupants of which couronieu cacu
other as
absolute cquals: AMERICAN CONSTITUIONAL LAW, 42; also, 163, 184-185
49. According to PRIEDRICH, federalism should not be seeu 'oaly as a static pailer(199
dynamic tems. "Fedral relations are fluctuatiug relations in the very uauro o ed edleralisuhy finu and isun-a
"process, an cvolving patero of chaugiog reatiouships rather than a stalic ues of the actual work
alterable rules." He maintaios that 'dual
of federalism' is uo louger "a reau o to a considerable cexucl
ing Amnerican federalism in whicb co-operaiou has replaced o ario
"More and more, the States appear as admiaistrative
subdivisions o
supported by grants-in-aid, supervisea a u iated by growing
another day which must be federil
Du
seaucracy.
8).
FRIEDRICH. TRENDS OF FEDERALISMIN THEORYAND PRACICE,7, 24, 173,
209Supra, Sec. A, this Chapter.
856 PARTIV-CHAP. XIV-Co-OPERATIVE FeDERALISM
national as well as regional parties. Accordingly, the policies evolved by the Central
Govemment is the product of the balance of national and regional aspirations and
perceptions.
Demands have been raised from time to time for re-ordering of the Indian federal
ism. This trend became pronounced as various political parties came on the scene and
the Centre and the States fell under the sway of seyeral political parties rather than
remain under a single party. It is inevitable, therefore, that in course of time, the
States gain in stature and improve their bargaining position vis-a-visthe Centre.
It is interesting to note in this connection that the Government of Tamil Nadu, dis-
satisfied with the Constitution, appointed a Committee in 1969, known as the Raja
mannar Committee, "to examine the entire question regarding the relationship that
should subsist between the Centre and the States in a federal set up, with reference to
the provisions of the Constitution of India, and to suggest suitable amendments to the
Constitution so as to secure to the States the utmost autonomy."
The Committee in its report issued in 1971 criticised certain aspects ofthe Indian
Constitution because they were not reconcilable, in the opinion pf the Committee,
with the standard set by it, viz, co-ordinate and dual federalism. But the Commit-
tee accepted the position that the power vested in the Centre "does not reduce the
status of the States to that gf administrative units in a unitary govemment as in the
days of the British Rule. The Committee suggested some modifications in the
Constitutional provisions relating to the distribution oflegislative and taxing powers,
emergency, etc.
-While no harm is done by raising a public debate on the issues involved, and by
making necessary adjustments in the Constitution, if found necessary, the point re-
mains that the theoretical, a priori, criticism of the Constitution by invoking the or
thodox concept of 'dual federalism' is not tenable as that concept is no longer valid
in modern federalism. Amendments in the Constitution can only be justified if they
better serve, and promote, public interest and welfare, and not merely because of any
theoretical considerations. ît will be necessary to evaluate any proposed amendment
from the point of view of its impact on other States as well. The proposals made by
the Rajamannar Committee suffer from an extreme over-statement of the case for
State autonomy. These not evoke måch public enthusiasm and were
proposals did
nor by any Al India political party, and
endorsed neitherby any State
the report became a dead letter.
Government

The matrix of Centre-State relationship was also considered by the Administrative

came to the con-
Reforms Commission. In its report issued in 1969, the Commission
sound and must remain
clusion that "the basic Constitutional fabric of ours is quite
intact." Further, in the opinion of the Commission: "No constiutional amendment is

necessary forensuring proper and harmonious relations between the Centre and the
States, inasmuch as the provisions of the Constitution governing Centre-State rela-
uons are adequate for the purpose of meeting any situation or resolving any problems
that may arise in this field." The Commission rightly observed that the Constitution
was flexible enough to ensure its successful working irrespective of whichever party
it not
may be n power, provided that those who are. in power mean to work aFd
Wreck it. The Government of India agreed with this view of the Commission."

51. Report, 16.

in ILI, CONSTTUTIONAL DE
52. M.C.. KAGZ1, ACritique of tie Rajamannar Commitee Report,
VELOPMENTS SINCE INDEPENDENCE, 255 (1975).
Also, MPJAIN, Background Pape, supra, note 1 on 554.
53. ARC Rep 7. Also see, SETALVAD; Union-State Relations, 226-236 (1974).
54. THE TIMES OFINDIA, dated April 18, 1975.
20?
 CAN THE INDIAN CONSTITUTION BE CHARACTERISED AS FEDERAL? 857

These exercises did not give a quietus tothe demand for revising the CeFtral-State
relationship. The demand for the same has been made from time to time." The de-
mand became more voiceferous with the emergence of several State governments
(Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal and Jammu and Kashmir) in
belonging to the regional political parties other than the national political party
power at the Centre.
In 1983, in response to an insistent demand to review the Centre-State relaticns,
the Central Govermment appointed the Sarkaria Commission under the Chairmanship
of Justice R.S. SARKARIA, a retired Judge of the Supreme Court, with the following
terms of reference: to examine and review the working of the existing arrangements
between the Union and States in regard to powers, functions and responsibilities in
all spheres and recommend such changes or other measures as may be appropriate
keeping in view "the social and economic developments that have taken place over
the yearS and have due regard to the scheme and framework of the Constitution
which the founding fathers have so sedulously designed to protect the independence
and ensure the unity and integrity of the country which is of paramount importance
for promoting the welfare of the people." Thus, the terms of reference for the Com-
mission specífically laid emphasis that the Commission would in making its recom-
mendations give due regard to the need for maintaining the unity and integrity of the
country.
The Commission presented its report in 1988. In its report while the Commission
suggested some adjustment in the Centre-State relationship in several ways, it did not
make any suggestion for any fundamental change in the structure of the constitu-
tional provisions relating to federalism.
Several problems have become apparent in the practical working of the Indian
Federalism over the years. The crucial fact that has emerged is that there is an imbal-
ance between the functions and resources at the State level. Their tax resources have
.proved to be inelastic while all the money-consuming social services fall within their
purview. It is also true that not all States utilize their taxing powers fully because of
political pressures. Economic conditions vary from State to State. While the tax
raising capacity of the poor States is low, theirfiscal needs are very high. There exist
vast differences in the scale of social services from State to State. In some States, the
expenditure on social services is pitifully low. Then there occur national calamities
like famines and floods from time to time taxing the resources of the States. The
States are being kept solvent because of the massive transfer of funds from the Cen-
tre by way of tax-sharing, grants and loans. The fact also remains that most of the
States do not use their financial resources prudently.
Some of the opposition-ruled States want more powers and more autonomy. They
want more legislative powers. One drastic suggestion made in this connection is that
the Centre should confine itself only to four subjects, viz., defence, extermal affairs,
communications and currency, and leave all the rest of the functions (including the
residuary) to the States. The States are clamouring for more taxing powers and more
central assistance. They want funds to flow to them through the Finance Commission
instead of the Planning Commission because the former funds are non-discretionary
and untied and the latter funds are discretionary and tied to specific purposes, and
some States have a feeling that there is discrimination against them in allocation of
such funds. They want a share in the corporation tax which is non-sharable at pres-
ent; they want full autonomy to use thee power to levy sales tax and do not like the

55. See. ALICE JACOB, New Pressureson lIndian Federalism: Demand for State Autonomy in ILI,
CONSTITUTION: TRENDS & IssUES, 370. INDIAN
858 PARTIV-CHAP. XIV-Co-oPERATIVE FeDERALISM

scheme of levying additional excise in licu of sales tax on selected commodities." It

is being suggested that the Finance Commission be rmade a permanent body instead
of being appointed, as at present, after five years. Another suggestion is that the role
of the Finance Commision be enlarged so as toenable it to deal both with the plan
and the non-plan expenditure as well as with total central assistance to the States. It is
being argued that the States should get the bulk of funds from the Centre under Art.
275 and that Art. 282 should only play a residuary role unlike the present situation
when bulk ofthe funds for planning purposes pass to the States from the Centre un-
der Art. 282.
Some States want greater economic freedom to develop the States faster and criti-
cise the expansive use made by the Centre of its power under entry 52, List I. They
would like the Centre to confine itself only to such industries as may be vital to na-
tional development.
The apposition-ruled States have a grievance that the ruling party at the Centre
misuses the institution of Govermor to further its own political interests in the
States. No healthy precedents have been set so far as to how the Governor should
conduct bimself in different situations," It is being suggested that the position of the
Govemor should not be different from that of the President.
The States do not like Art. 356 which hangs on their heads as the democle's sword.
It is being said that the Central govcrnment uses Art. 356 at times to further its own
political interests by removing governments of different political complexion from
office.
It is also being claimed that over the years, the Planning Commission has just be-
come an appendage of the Central govemment and to introduce objectivity in plan-
ning, it should be made an autonomous body, that the State planning machinery be
strengthened and that an inter-State Council consisting of the Prime Minister and the
Chief Ministers be established under Art. 263.
It is true that during the last fifty years, strong centralising tendencies emerged in
India. To a great extent, this was due to the fact that for long one political party, the
Congress Party, was in power at the Centre as well as in all the States. The domi-
nance of one political party for long did inevitably generate centralising trends. But
now things have changed. The Congress Party has lost its pre-eminent position; it has
lost its monopoly of power. Many political parties having regional, rather than na-
ional, perspectüve have emerged having different political ideologies and sôme of
them have assumed power in some of the States. Further, even the Central Goverm-
ment is composed of a coalition of several political parties. This political develop-
ment has checked the generation of centripetal forces.
1he States to-day are in a much stronger position to assert themselves, to exert
pressure on, and to bargain with, the Centre. This is resulting in the emergence of a
more balanced federal system in India. The Supreme Court has also helped this proc-
Ess through its decision in Bommai by putting some restraints upon the exercise of its
power under Art. 356." The Court has declared federalism as the basic feature of the.

56. Supra, Ch. XI, Sec. L.

57. Supra, Ch. XI, Sec. L.
58. Supra, Ch. VIl, Secs. A and C.
59. See the White Paper on The office of the Governor issued by the Karnataka Goverument, THE HINDU
INT'L, OctL 1, 83.
60. See, ILI, PRESIDENT'S RULE IN THE STATES, 176-81.
61. Supra, Sec. C, this Chapter.
203
62. For Bomumai, see, supra, Ch. XI, Sec. Eb) and (c).
 CAN THE INDIAN CONSTITUTION BE CHARACTERISED AS FEDERAL? 859

Constitution. Thus, whatever the constitutional provisions, the evolution of the In-
dian federalism for some time now has been towards a more balanced system with
accent on State autonomy.
While there may be a case for some re-adjustment in the Central-State relationship
nor desir
in India, a drastic re-orientation of the Indian federalism is neither feasible,
able, nor called for. There are many practical reasons militating against too much
devolution of power on the States, against too much decentralisation.
Whatever the
For one, the economic conditions of all the States is not unifom.
others
scheme of division of taxing powers may be, while some States may benefit,
themselves. The
may lose and they will not be able to raise enough resources for
need for Central help to the States will thus continue. This is the experience of all
cannot be too much
other federations. This means that the Centre's financial capacity
impaired.
from time to time needing massive
Two, national calamities will continue to arise administrative infra-structure in.
funds which only the Centre can manage. Three, the unless there is a
the States is weak and is not capable of carying greater load Finance Commis-
a
the
wholesale effort made to improve it. As already pointed out,
sion makes provision in its scheme of
devolution of Central grants for funds to im-
there are the demands of industry,
prove the State administrative machinery. Then,
and not local dimensions. State taxingg
trade and' commerce which have national come in the way of
tax on roads and motor vehicles
powers such as sales tax, octroi, and the businessmen constantly make
demands
free flow of national trade and traffic
sales tax with excise and so on." The States
for abolition of octroi, integration of to raise revenue. Sales tax
these demands because it will reduce their capacity
oppose
for the States.
is the main source of revenue
over the years, efforts have
been made to improve
It may be of interest to note that noted, the Fi-
states in several ways. First, as already
the financial capacity of the
Commissions have been progressively suggesting larger devolution of Central
nance
have progressively interpreted taxing pow-
State
funds to the States. Two, the courts the Constitution'enhanced the
ers liberally. Three,
the Centre has itself by amending funds
area of sales tax. Fourthly,
devolution of large
State taxing powers, e.g., in the Com-
from the Centre to the States through the medium of the Planning
takes place
mission.
time to re-orient Indian
claims and demands have been made from tine to of these
Many been exaggerated and unrealistic. Many
Federalism, but most of them have
demands are politically-motivated
rather than based on pragmatic considerations.
in
Sarkania Commission has rejected many of the claims made by the States their
The the constitutuonal
favour for reordering the federal system.
The inherent soundness of
Centre-State relations has been
vindicated by the Sarkaria
provisions concerning of of these provisions
has been
as no major amendment any
Comnission's report recommendations of the
Commission are:
suggested. Some of the major be
residuary powers
has rejected the suggestion that
() TheCommission
transferred from the Centre to the States.

Additional
XLI, infra. of Sales Tax by
63. For discussion on this doctrine, see, Ch.Rental Agreement: Replacement
ALICE JacOB, Tax JT9(1/8).
04.
See S.N. JAIN & CONSTITUTION: TRENDS
& 1SSUES,
Duiesof Excise in I.L.I, INDIAN
65. REPORT, 31.
860 PART IV-CHAP. XIV-Co-OPERATIVE PEDERALISM

(2) The Commission has emphasized that the rule of federal supremacy is in
dispensable for the successful functioning of any federal system. "It is the
kingpin of the federal system."*
(3) The Commission has rejected the demand for repeal of the most conten-
tious provision in the Constitution, viz, Art. 356. The Comgmission has
however suggested that Art. 356 should be used very sparingly."

(4) The Commission has rejected the demand for the merger of the Finance
Commission and the Planning Commission.

(5) The Commission has maintained that it is necessary to retain Art. 365
caution and invoked only in extreme
though it should be used with great
cases.
(6) The Commission has reçommended the creation of the Intergovemmental
Council under Art. 263.
re-orientation of Central-State relationship can be the
The only touch-stone for any of socio-economic conditions
provision of better services
to the people, improvement
and promotion of national unity, stability and integrity. No a priori, dogmatic or
doctrinaire approach, no approach based on the old and discarded view of competi-
tive federalism, can serve the purpose in the moderm context.
A
As has already been stated, such a view prevails in no modem federalism now.
with each other. A strong Centre
strong Centre and strong States are not incompatible
does not imply that the States must necessarily be weak. Both ought to be strong
Centre could
within the constitutional framework. Both are inter-dependent and the
not be strong without strong States and vice versa.
their
There is a lot which the States can do to help themselves and improve
their administrative infra-
strength and position. They can, for instance, improve financial position by im-
structure and make it more efficient; they can improve their
of such social services as edu-
proving their tax collecting machinery; the condition a lot of
cation and health is pitiable in some of the States and they have to make up
leeway in this area; they can improve the working of their electricity boards, road,
The way these bodies
transport services, public enterprises and imigation projects. that things will be
are functioning at present in th States does not inspire coFfidence
much better if more powers were to devolve on the States."
becomes unitary nor
It is very necessary to ensure that neither the federal set-up
India.
that it becomes too loose and weak affecting the unity of
the process of
Federalism is not a static but a dynamic concept. It is always in
evolution and constant adjustments from time to time in the light of the contempo-
and negotiations
rary needs and the demands being made on it. Constant discussions
between, the Centre and the States in various fora can help in removing the frictions
and difficulties in the area of inter-govermmental co-operation and for sorting out
these differences with a view to making the Indian Federalism more robust and
viable system so that India may successfully meet the great
challeiges of defence,
external and intermal security and socio-economic development.

66. Ibid., 28.

67. 1bid, 177.
68. 1bid, 284.
209
69. Ibid, 107.
70. 1bid, 237-240.
of the SEVENIH FNANCE COMMISSION.
71. See the REPORT