In a recent ruling, the Supreme Court highlighted that Indian federalism is a balance between cooperative and uncooperative federalism. The court stated that the recommendations of the GST Council are not binding on State governments, giving them the freedom to either collaborate or contest with the Union government. This observation acknowledged the legitimacy of contestation in uncooperative federalism. Over the past eight decades, Indian federalism has fluctuated between contestation and collaboration. The Constitution intentionally left the federal structure open to interpretation, as described by B.R. Ambedkar, to accommodate the needs of developing state institutions and economic growth. Consequently, the functioning of Indian federalism is largely determined by political culture rather than legal architecture.
During the first phase of Congress dominance (1947-67), the federal system operated smoothly as the Central government and most State governments were under Congress control. Contentious issues were settled collaboratively within the framework of the “Congress system”. The second phase (1967-1989) saw more contestation, especially during Indira Gandhi’s centralized regime, where state instruments were used to undermine opposition governments. The coalition phase (1989-2014) marked the peak of Indian federalism, with regional parties gaining significant power and driving reforms in financial and administrative devolution. Under the current Narendra Modi government, there has been a return to one-party dominance, leading to a shift back towards contestation.
While the media often portrays the main political battle in India as between secularism and communalism, it is actually a battle between a federal and unitarian idea of India. Regional parties have come together to challenge the BJP’s authoritarianism, which undermines the rights of the states. Even the Congress, led by Rahul Gandhi, has framed its contest with the BJP as a clash between a monolithic idea of India and a “Union of States” idea of India. Regional pride has proven to be the only effective counterforce to Hindutva. The BJP has successfully overcome caste barriers but has struggled to defeat regional parties based on linguistic identity.
The current centralization of power in the Modi era resembles the Indira years, as the Prime Minister displays an authoritarian streak and disregards democratic processes and conventions. Important laws are passed without much debate, and executive fiat has been used to extinguish the State of Jammu and Kashmir and frustrate opposition governments through the office of the Governor. Centralization is also driven by the BJP’s majority in the Lok Sabha and near-majority in the Rajya Sabha, along with the fragmented and weak opposition. Accommodative approaches are no longer necessary for the ruling party.
In addition to political centralization, there is a concentration of business power at the national level. The top 20 most profitable companies in India account for a large percentage of corporate profits, with the Adani group benefiting greatly from government contracts. The Modi government’s focus on finance, labor, land, and agriculture can be seen as part of this centralizing drive. While there are similarities between the centralization of power under Indira Gandhi and Narendra Modi, there are also differences. Modi’s centralization has a substantive ideological basis rooted in Hindu nationalism and aims to transform the nation. Fiscal and administrative centralization is used for partisan advantage, but with a different mechanism than Indira Gandhi’s discretionary funds.
Overall, Indian federalism continues to evolve and is shaped by political culture and the balance between contestation and collaboration. The current political landscape is characterized by a battle between a federal and unitarian idea of India, with regional parties playing a crucial role in opposing the BJP’s centralizing tendencies.