Subject: Indian Polity

Recent changes in center-state relations reflect a complex interplay of fiscal, administrative, and constitutional dynamics, marked by landmark Supreme Court judgments and institutional reforms aimed at strengthening cooperative federalism.

Recent Changes in Center-State Relations

Fiscal Relations

• The 15th Finance Commission recommended 41% devolution of central taxes to states (2021-26), adjusting for the creation of new UTs of J&K and Ladakh.
• Allocation of ₹4.36 lakh crore in grants to local bodies strengthening grassroots governance.
• Implementation of GST compensation mechanism showcasing fiscal federalism in practice.

Administrative Reforms

• Reconstitution of Inter-State Council (ISC) with PM as chairman, demonstrating renewed focus on cooperative federalism.
• Enhanced role of NITI Aayog in promoting competitive federalism through initiatives like Aspirational Districts Program.
• Strengthening of Zonal Councils to address regional concerns and interstate disputes.

Judicial Interventions

• Supreme Court's landmark judgment (2023) clarifying Delhi government's control over civil servants.
• Ruling on West Bengal vs CBI case (2024) reinforcing state autonomy in law enforcement.
• Tamil Nadu governor case (2025) establishing timeline for gubernatorial actions on state bills.

Measures to Strengthen Center-State Relations

Institutional Mechanisms

• Regular convening of Inter-State Council meetings for meaningful dialogue.
• Strengthening NITI Aayog's role as a platform for policy coordination.
• Establishing clear protocols for Governor's role in state administration.

Financial Empowerment

• Ensuring timely release of states' share in central taxes.
• Expanding states' borrowing capacity with reasonable conditions.
• Creating dedicated funds for disaster management and climate change.

Administrative Coordination

• Promoting All India Services reforms with state consultation.
• Developing consensus-based approach in concurrent list subjects.
• Strengthening state representation in national decision-making bodies.

Policy Implementation

• Allow states flexibility within national frameworks like NEP 2020 to preserve linguistic and cultural diversity.
• Avoid financial conditionalities (e.g., denial of Samagra Shiksha funds for not adopting NEP fully) which undermine autonomy.

Resolve Interstate Disputes Collaboratively

• Empower Inter‑State Council to mediate issues like river-sharing (e.g., Karnataka–TN, Bihar–West Bengal).
• Central facilitators to avoid coercive impositions in area of state priorities.

The path forward lies in nurturing a balanced federal structure through institutional dialogue, fiscal empowerment, and mutual respect between the Union and States. The success of initiatives like Cooperative Federalism and Team India depends on building trust and ensuring equitable partnership in nation-building.