Active Stocks
Fri Sep 29 2023 15:59:14
  1. Tata Steel share price
  2. 129 1.78%
  1. NTPC share price
  2. 245.65 3.3%
  1. Power Grid Corporation Of India share price
  2. 199.85 -0.45%
  1. State Bank Of India share price
  2. 598.7 1.48%
  1. Wipro share price
  2. 406.25 0.11%
Business News/ Opinion / The state of the Indian federation

The state of the Indian federation

The Inter-State Council should become the forum for political and legislative give and take between the centre and states

Photo: PTIPremium
Photo: PTI

The Indian nation is a federation with a unitary bias.

At first glance, that sounds like a trick statement destined to get you to fail your high school civics examination. But that is as accurate a statement as one can make about the nature of the relationship between the centre and the states in the Indian Constitution.

Part XI of the Constitution (Articles 245 through 263) deals with centre-state relations. It covers legislative and administrative relations between states. The financial relationship between the centre and states is covered in the next chapter of the Indian Constitution, including Article 280 that deals with the mandate for setting up a periodic Finance Commission. The peculiar phrase “unitary bias" arises because residuary powers—the power to legislate on matters not enumerated in the central, state or concurrent list of subjects—is given to the centre under Article 248. This is unlike the constitutions in many other federations such as the United States, Germany and Australia where such power is conferred on the states.

The Constituent Assembly debates are a rich source of discourse on the intertwined threads of discussion on the subject that took place in newly independent India. A paranoia about disunity and the need for uniform development dominated other threads like prevailing constitutional design, minority protection and the interest of princely states. Arguments by Alladi Krishnaswami Ayyar and Babasaheb Ambedkar combined with the horrific event of partition sealed the case for residuary power to be allocated to the centre. Ambedkar summed it up this way, “the use of the term ‘Union’ is deliberate. I can tell you why the Drafting Committee used it. The Drafting Committee wanted to make it clear that though India was to be a federation, the federation was not the result of an agreement by the states to join a federation and that the federation not being the result of an agreement, no state has the right to secede from it. It also explains the fact that the Union is indestructible but not the States; their identity can be altered or even obliterated."

Despite this bias, in the early years after independence, the central government took many steps to encourage a federal character to its functioning. A National Development Council was set up in 1952 and a National Integration Council was similarly set up in 1962. Annual conferences were held between the centre and state chief ministers on finance, labour, food and other functional areas.

The first constitutional body—called the Inter-State Council (ISC)—was set up in 1990 following the initial recommendation of the First Administrative Reforms Commission (1969), which was endorsed by the Sarkaria Commission on centre-state relations (1988). During the intervening Indira Gandhi years, there was a gradual centralization that diminished the political, legislative and administrative power of the states.

The ISC’s mandate is to investigate and discuss matters in which states and the Union have a common interest and to make recommendations on such matters particularly with respect to coordination of policy and implementation. The ISC has met 10 times since it was established. Eight of the 10 meetings have been held during non-Congress governments. It met this month, for the 11 time, after a gap of 10 years.

The Narendra Modi government should be applauded for reviving the ISC. The tabled topics for this meeting were direct benefit transfers using Aadhaar, education and internal security. It also discussed the Punchhi Commission report (which interestingly introduced the term cooperative federalism) on centre-state relations. Modi most likely did it for political reasons—key reforms like the goods and services tax (GST) bill require support in the Rajya Sabha. But that is precisely the point. The ISC is the only multilateral centre-state forum that operates directly within the framework of the Constitution (Article 263 (b) and (c)) where topics like the GST and contemporary issues like disaster management, terrorism and internal security can be taken up.

The ISC should be further strengthened to become the critical forum for not merely administrative but also political and legislative give and take between the centre and states. It should function in such a manner that it reflects the equal status of states and the centre. It should meet once a year. Even though the ISC’s mandate is very broad, its aspiration has generally been limited to discussing affirmative action, welfare subjects and administrative efficiency and coordination.

While India needs as many forums as it can get to improve implementation efficiency (given a massive implementation deficit), the ISC should not be one of them. Along with another constitutionally sanctioned entity—the Finance Commission (FC)—the ISC should be the body that puts the “federation" back in the definition of the Indian nation. Together, the FC and the ISC should operationalize again Part XI and XII of the Constitution that ensure appropriate financial devolution and political decentralization. India’s true potential will be achieved only when both the centre and the states are strong.

P.S.: Paraphrased in a federal context, Jawaharlal Nehru said “the only alternative to coexistence is codestruction".

Narayan Ramachandran is chairman, InKlude Labs.

Comments are welcome at To read Narayan Ramachandran’s previous columns, go to

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 25 Jul 2016, 01:52 AM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App