1. The Constitutional History of India.
2. The sheer size of the country.
3. Nature of complex diversities based on religion, language, region, culture and so on.
4. Experience of partition.
The text of the Constitution does not mention anywhere the use of the term ‘federal’ or ‘federation’. The Supreme Court has spoken of the Indian Union as ‘federal’, ‘quasi-federal’ or ‘amphibian’ meaning sometimes ‘federal’ and sometimes ‘unitary’.
Actual Working Federalism in India
To understand the concept of federalism in India, it is important to note the factors behind adopting a quasi-federal constitution in the country. Indian federation is not a federation strictly like in America, Australia or Sweden.
In those countries, the sovereign units came together and formed a federation voluntarily. But India historically has been a unitary state and the painful experience of Partition forced our constitutional forefathers to opt for a strong union.
In recent times, however, the States have been demanding more powers from the Union and to some extent are succeeding in their efforts to the emergence of coalition governments at the Centre.
The end of single party rule at the centre and the domination of regional parties in Government formations have given enough scope for the States to demand more from the Centre.
Regional disparities have led the States not only to take divergent positions on the criteria for federal fiscal transfers but also more lately for new constitutional reallocation of powers and revenue resources between the Centre and the States.
For example, the criteria for the distribution of income tax between the two levels of government among the States have been highly contentious. More industrialised States have advocated for a greater weight age for the criterion of the place of collection of the tax, while poorer and more populous states have emphasised population as the major criteria. Neither is foolproof.
Another area of friction between the Centre and the States is the transfer of the centrally sponsored schemes to the States on the pleas of lack of funds. Most of the State governments demanded closure of the centrally sponsored schemes all together so that they can have their own programmes to suit to the local needs.
But historically, the tendency of the Central Government has been to take away the powers of the State Governments through Constitutional amendments. For example, the 42nd Constitutional Amendment took away some of the subjects from the State List and transferred them to the Concurrent List giving power to Central Governments to make laws on those subjects.
Sarkaria Commission looked into the aspects of Centre-State relations and gave valuable suggestions to improve them. The latest meeting of the Inter State Council discussed in detail the recommendations relating to the Union, State and Concurrent Lists and it is believed that in the near future more powers will be transferred to the State Governments for effective governance.