Subject: Indian Polity

Dr. B.R. Ambedkar envisioned Indian federalism as a flexible mechanism, unitary in emergencies and federal in peace. Today, as India targets Viksit Bharat 2047, this balance is rapidly evolving through new fiscal, administrative, and judicial paradigms.

Measures to Strengthen Federalism

Recent Changes in Centre-State Relations

1. The Union expanded the Scheme for Special Assistance to States for Capital Investment (SASCI), linking ₹1.5 lakh crore in interest-free loans to state-level urban and land reforms.
2. Adhering to the 16th Finance Commission framework, the Centre has strictly capped annual state fiscal deficits at 3% of GSDP to enforce compliance-driven fiscal federalism.
3. The government authorized the rollout of the GST Appellate Tribunal (GSTAT) with state benches, decentralizing tax dispute resolution away from overburdened High Courts.
4. NITI Aayog deepened competitive federalism by launching the Aspirational Blocks Programme, shifting policy partnerships directly to the grassroots block level.
5. The Union Home Ministry significantly increased Zonal Council meetings (over 60 recently) to resolve inter-state infrastructural and policing disputes proactively.
6. NITI Aayog launched the Behavioural Insights Unit to collaborate with states, ensuring central welfare schemes are adapted to local cultural contexts.
7. In a massive boost to state fiscal autonomy, the Supreme Court (MADA vs. SAIL, 2024) upheld states' exclusive legislative power to tax mineral-bearing lands.
8. Resolving severe administrative friction, the Supreme Court (TN vs. Governor, 2025) eliminated the Governor's "pocket veto" under Article 200, enforcing strict timelines for bill assent.

Measures to Build Trust and Strengthen Federalism

1. Adopt the Punchhi Commission recommendation mandating a strict cooling-off period for active politicians before their appointment as Governors to ensure institutional neutrality.
2. Parliament should formally amend the Constitution to codify the Supreme Court's 1-month and 3-month deadlines for gubernatorial decisions on state legislation.
3. To restore trust in revenue sharing, the Centre must progressively merge cesses and surcharges—currently excluded from the divisible pool—into the standard tax base.
4. Transition away from rigid, milestone-conditional grants back toward untied funds, enabling states like Kerala or Bihar to fund their unique demographic priorities autonomously.
5. Elevate the Inter-State Council (Article 263) from an ad-hoc body to a permanent, actively convening institution meeting thrice annually to preemptively resolve non-legal frictions.
6. Avoid using financial coercion (e.g., withholding Samagra Shiksha funds) when states request flexibility in implementing Concurrent List subjects like NEP 2020.
7. Establish an independent dispute resolution mechanism within the GST Council to balance the Centre's effective veto power holding one-third of the voting weight.

Fostering mutual trust is not just a constitutional obligation but an economic necessity. By shifting from centralized conditionality toward the "pragmatic federalism" envisioned in the Bommai judgment, the Centre and States can truly function as Team India, combining their unique strengths to achieve sustainable, inclusive, and decentralized growth.