Federalism

Why This Matters

Think about your own daily life for a moment. The currency note in your pocket is the same all over India — the same rupee works in Kashmir and in Kerala. The army that guards the border is one single army for the whole country. But the police officer in your area answers to your state government, not to Delhi. The school you study in follows rules set partly by your state and partly by the centre. And the drinking water, the street lights and the drains in your gali are looked after by your local panchayat or municipality.

So who exactly is “the government”? The answer is surprising. It is not one government. It is many governments, stacked one above the other, all working on the same people at the same time. One looks after the whole country. One looks after your state. One looks after your village or town. Each has its own job. And each gets its powers not from the goodwill of the others, but from the Constitution itself.

This arrangement has a name: federalism. And it is one of the cleverest ideas in our political system. India is huge. It has more than a hundred major languages, every big religion on Earth, and regions as different as the snow deserts of Ladakh and the backwaters of Kerala. A country this varied could easily have torn itself apart. Federalism is a big part of the reason it did not. It lets a giant, diverse country stay united — without forcing everyone to be the same. That is why this chapter matters far beyond the exam.

The Big Idea

Federalism is a system of government where power is divided between a central authority and several smaller units of the country (the states). There are two or more levels (tiers) of government, and they all govern the same citizens at the same time — but each tier has its own clear jobs to do. Here is the key point that makes it federalism and not something else: each tier’s powers are written down and guaranteed by the Constitution, so one level cannot simply take away another level’s powers. The centre cannot order a state around inside the state’s own sphere, and the state cannot order the centre. Both answer directly to the people. India is a federation. The Constitution divides law-making into three lists — the Union List, the State List and the Concurrent List — matching each subject to the level best suited to handle it. Federalism has a double goal: to keep the country united, while still making room for its huge diversity.

Let’s Break It Down

Before we go further, two ideas from Chapter 1 do a lot of the heavy lifting in this chapter. If they feel hazy, this quick reminder will fix that.

What exactly is federalism?

Federalism is a system of government in which power is divided between a central authority (the government for the whole country) and various smaller units of the country (usually called states or provinces). Usually a federation has two levels of government. One is the government for the entire country. It looks after a few subjects of common national interest — things like defence and currency. The others are the governments at the level of states. They look after most of the day-to-day running of their state. The most important part is this: both these levels enjoy their power independent of the other.

What does “a level of government” or a “tier” even mean? Here is a simple way to picture it.

Figure 2.1 below shows these three tiers and the one fact that ties them together — they all rule the same person.

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Federal vs unitary — the real test

To really understand federalism, you have to see what it is not. The opposite of a federal system is a unitary system. Under a unitary system, either there is only one level of government, or the smaller units are below the central government and take orders from it. The central government can simply pass orders down to the provincial or local government.

But in a federal system, this cannot happen. The central government cannot order the state government to do something inside the state’s own area of work. The state government has powers of its own, and for those powers it is not answerable to the central government. Instead, both governments are separately answerable to the people.

This is the single sharpest difference, so let us see the two side by side. Figure 2.2 below contrasts a unitary set-up with a federal one.

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Here are the key features of federalism. Read them slowly — each one is a separate promise the system makes:

Notice the last feature again, because it is the deepest one. A federal system has a double goal: keep the country united, and respect its diversity. For this to actually work, two things are needed. The different levels must agree on the rules of sharing power. And they must trust that each side will keep its part of the deal. An ideal federation has both — mutual trust and a genuine agreement to live together.

Here is a quick check to make sure the federal–unitary line is clear in your head.

Why give regions their own power at all? (the deep reason)

Here is a question NCERT states the answer to but never really explains: why does federalism hold a hugely diverse country together, instead of letting it break apart? It feels backwards at first. If you split power among many regions, shouldn’t that weaken the country and pull it to pieces? The truth is the opposite. Let us walk through why, step by step.

Imagine a country with many languages, religions and regions — like India. Now imagine all the power sits in one place, at the centre, far away. The centre decides everything for everyone. What happens to a region whose language, culture or needs are different from the centre’s? Its people start to feel unheard. Their language gets no place in their own schools and courts. Their special needs get ignored. Slowly this turns into anger. And anger that has no other outlet turns into one dangerous thought: “We would be better off on our own.” Demands to break away grow. The country starts to crack. This is roughly the trap Sri Lanka fell into by ignoring its Tamil minority.

Now run the same country with federalism. Each region gets real power over its own affairs — its language, its schools, its land, its local police. Suddenly the people of that region feel respected and in control of their own lives. The grievance that was building up simply has nothing to feed on, because the thing they wanted — a say over their own affairs — they now have. So the anger drops. And here is the beautiful part: when a region feels its identity is safe inside the country, it has every reason to stay. Unity grows because diversity is accommodated, not crushed.

Figure 2.3 below puts these two paths side by side so you can see why the same diversity leads to break-up in one case and to unity in the other.

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Two routes to a federation: coming together vs holding together

Not all federations are built the same way. The balance of power between the centre and the states is different from one country to another. This depends mostly on the history of how the federation was formed. There are two routes.

The first route is “coming together”. Here, several independent states join up on their own to form one bigger country. They do this to feel safer and stronger together. Because they came willingly, and were independent before, they keep a lot of power for themselves. So in these federations, the states are usually strong and equal, and quite powerful next to the central government. Examples: the USA, Switzerland and Australia.

The second route is “holding together”. Here, one large country decides to share its power downward, between the central government and the states. The country was already one; it chose to divide power to better manage its diversity. Because power flowed down from the top, the central government stays stronger than the states. And the states are often not equal — some units may even be given special powers. Examples: India, Spain and Belgium.

So which is India? India is a holding-together federation. We were one country first; we then shared power down to the states. This is exactly why our centre is comparatively strong, and why, as you will see, some Indian states have special powers that others do not.

Figure 2.4 below shows the two routes — notice that the arrows point in opposite directions.

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What makes India a federal country?

India became independent in 1947 after a painful partition. Soon after, hundreds of princely states joined to become part of the country. The Constitution then declared India a “Union of States”. Interestingly, it did not use the word “federation” anywhere. But do not let that fool you — the Indian Union is fully based on the principles of federalism. Go back to the seven key features above: every one of them fits the Indian Constitution.

The Constitution first set up a two-tier system: the Union Government (also called the Central Government), and the State Governments. Much later, a third tier was added — the Panchayats and Municipalities (we will come to those at the end). Each tier has its own separate area of work.

How the Constitution divides power: the three lists

This is the most important part of Indian federalism, so let us go slowly. The Constitution divides the power to make laws into three lists of subjects. The idea behind splitting them is simple and clever: match each subject to the level of government best suited to handle it.

Why three lists, though, and not just two? Think about the different kinds of subjects a country deals with. Some subjects are truly nation-wide — they need one single policy for the whole country. Some subjects are basically local — they are best decided close to the people who live there. And some subjects fall in between — they matter to both the centre and the states. Three kinds of subjects naturally need three lists. Here is each one:

• The Union List holds subjects of national importance — defence of the country, foreign affairs, banking, communications and currency. Why these? Because we need one uniform policy on them across the whole country. You cannot have each state printing its own money or running its own army. So only the Union Government can make laws on Union List subjects.

• The State List holds subjects of state and local importance — police, trade, commerce, agriculture and irrigation. These are best handled by people who know the local situation. So only the State Governments can make laws on State List subjects.

• The Concurrent List holds subjects of common interest to both the Union and the states — education, forests, trade unions, marriage, adoption and succession. Both the Union and the State Governments can make laws on these. But what if their two laws clash? Then there has to be a tie-breaker, or the rules would contradict each other. The rule is: the law made by the Union Government wins. The state law gives way.

And one more case. What about a subject that fits in none of the three lists — like computer software, which simply did not exist when the Constitution was written? These are called residuary subjects (“residuary” means “left over”). The power to make laws on left-over subjects goes to the Union Government.

Figure 2.5 below lays out the three lists with examples, the clash rule, and where residuary subjects go.

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Let us put this division to work on a real situation, the way an exam question would.

States that are special — and units that are not

We said holding-together federations often do not give equal power to all units. India is exactly like that. All states do not have identical powers.

Some states enjoy a special status. States like Assam, Nagaland, Arunachal Pradesh and Mizoram have special powers under certain provisions of the Constitution (Article 371), because of their unusual social and historical situations. These special powers mostly protect the land rights, culture and jobs of the indigenous (original local) people. For example, Indians who are not permanent residents of such a state may not be allowed to buy land or a house there. The idea is to protect a small or distinct community from being swamped by outsiders.

At the other end are units that have very little power. Some areas are too small to become a full state, but they could not be merged into any nearby state either. Areas like Chandigarh, Lakshadweep, and the capital city Delhi are called Union Territories. They do not have the powers of a state. Instead, the Central Government has special powers in running them.

This whole sharing of power between the Union and the states is so basic to the Constitution that it is not easy to change. The Parliament cannot change it on its own. Any change must first be passed by both Houses of Parliament with at least a two-thirds majority. Then it must be approved (ratified) by the legislatures of at least half of all the states. That is a very high bar — which is exactly the point. It keeps any one level from grabbing power from the other.

And if the Union and a state still disagree about who holds a particular power? The judiciary (the courts) decides. The High Courts and the Supreme Court settle disputes about the division of powers. The court acts as a neutral umpire.

Here is a small puzzle that the chapter itself asks. See if your understanding of the three lists can crack it.

How is federalism made to work?

Here is something easy to miss. Having all these rules written in the Constitution is necessary, but not enough. A rule on paper means little if no one respects it in practice. The real success of federalism in India came from the nature of our democratic politics — the habits, choices and culture that made people actually respect diversity and want to live together. Let us look at the main ways this happened.

Linguistic states

The very first big test was the creation of linguistic states — states drawn so that people who speak the same language live mostly in the same state.

Compare the map of India in 1947 with the map today and you will be surprised. Many old states have vanished; many new ones have appeared. Boundaries, areas and names have all changed. In 1956, the boundaries of several old states were redrawn so that one language largely went with one state. (A few states were created not for language but to recognise differences of culture, ethnicity or geography — like Nagaland, Uttarakhand and Jharkhand.)

Now here is the part NCERT states as a fact but does not fully explain: when this idea was first raised, many national leaders were afraid it would lead to the break-up (disintegration) of the country. The centre even resisted it for a while. So why did the opposite happen — why did linguistic states make India more united, not less? Let us trace the actual chain.

Picture a person whose mother tongue is, say, Telugu, living in a state run mostly in another language. The school exams, the court papers, the government office forms — all in a language not fully their own. That is a daily grievance. It feels like being a second-class citizen in your own home. Now redraw the state so that Telugu-speakers share a Telugu-speaking state. Suddenly the schools, the courts and the offices can run in their own language. The grievance simply disappears — there is nothing left to be angry about. With the main complaint gone, the demand to separate fades. And as a bonus, administration becomes easier, because the government and the people now speak the same language. So recognising people’s identity did not divide India — it removed the very reason that might have divided it.

Figure 2.6 below follows this chain from the original fear to what actually happened.

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The language policy

The second big test was the language policy. India is perhaps the most language-diverse country on Earth. The 2011 Census recorded more than 1300 mother tongues, grouped into 121 major languages. Of these, 22 languages are listed in the Eighth Schedule of the Constitution and are called the Scheduled Languages.

Now think about the danger. In a country this varied, picking one language as the national language and forcing it on everyone would feel like crushing every other group’s identity — exactly the kind of grievance that breaks countries apart. Our leaders handled this with great care:

• Our Constitution did not make any single language the national language. Hindi was named the official language — but that is a smaller claim than “national language”.
• This caution made sense, because Hindi is the mother tongue of only about 44 per cent of Indians. Less than half. So there were many safeguards to protect other languages. Besides Hindi, the other Scheduled Languages are protected, and a candidate in a central government exam may write it in any of these languages.
• States have their own official languages too. Much of a state’s government work happens in the official language of that state.

There is a famous example of how cautiously this was done. The Constitution had said the use of English for official purposes would stop in 1965. But many non-Hindi-speaking states wanted English to continue. In Tamil Nadu the protest even turned violent. The Central Government responded wisely — it agreed to continue English along with Hindi for official purposes. (Some critics say this favoured the English-speaking elite. But it avoided a much worse split.)

The big lesson: the government promotes Hindi, but “promote” does not mean “force”. The centre cannot impose Hindi on a state where people speak another language. This flexibility is exactly what let India avoid the bitter language conflict that wounded Sri Lanka.

Centre-state relations

The third way federalism was strengthened is the slow improvement of centre-state relations — how the centre and the states actually deal with each other in practice. And this depended a lot on politics, not just the Constitution.

For a long time after Independence, the same party ruled both at the centre and in most states. This had a quiet bad effect: state governments did not really use their rights as independent federal units — there was no need to push back against a centre run by the same party. Worse, when a different party did win a state, the ruling party at the centre often tried to undermine it. The centre would sometimes misuse the Constitution to dismiss state governments run by rival parties. This badly hurt the spirit of federalism.

Things changed a lot after 1990. Two big shifts happened together:

• Strong regional parties rose in many states.
• The era of coalition governments began at the centre. (A coalition government is one formed by two or more parties coming together, because no single party won a clear majority on its own.)

Because national parties now had to form alliances with many regional parties to rule at the centre, a new culture of power-sharing and respect for state autonomy grew up. This was helped by a major Supreme Court judgement that made it much harder for the centre to dismiss a state government in an unfair (arbitrary) way. Put together, federal power-sharing is far more real and effective today than it was in the early years.

Decentralisation — the third tier

We have talked about two tiers — the Union and the states. But a country as enormous as India cannot be run on just two. Think about the scale: in population, Uttar Pradesh is bigger than Russia, and Maharashtra is about as big as Germany. And these states are themselves very diverse inside. So there must be power-sharing within states too. This is the reason for a third tier: the local government.

When power is taken from the central and state governments and given to local government, it is called decentralisation. (“Decentralise” means to move power away from the centre and down to the local level.)

Why does this matter so much? Here too NCERT states the answer but it is worth feeling why it is true. Think about a broken hand-pump or a blocked drain in your locality. Who knows about it best? Not an officer in the state capital, hundreds of kilometres away. The local people know their own problems best. They also know best where to spend the limited money and how to get things done. And there is a deeper democratic gift: at the local level, ordinary people can take part directly in decisions — they can actually attend a meeting and speak. This builds the habit of democratic participation. Local government is the best way to make real one key principle of democracy: local self-government — people running their own local affairs themselves.

Why earlier attempts failed, and what 1992 changed

The need for decentralisation was recognised in the Constitution from the start. Panchayats (in villages) and municipalities (in towns) were set up in all states. But they were weak in practice. Why? Because:

• They were kept directly under the control of the state governments.
• Elections to them were not held regularly.
• They had no powers or money of their own.

So on paper there was local government, but in real terms there was very little decentralisation.

The big change came in 1992. The Constitution was amended (these are the 73rd amendment for villages and the 74th amendment for towns) to make the third tier genuinely powerful. The new rules:

• It is now compulsory to hold regular elections to local government bodies.
• Seats are reserved for Scheduled Castes, Scheduled Tribes and Other Backward Classes — both ordinary seats and the head positions.
• At least one-third of all seats are reserved for women.
• An independent body, the State Election Commission, was created in each state to conduct the panchayat and municipal elections.
• State governments must share some powers and money with the local bodies. (How much is shared is decided with the help of a State Finance Commission, and it varies from state to state.)

How the structure is built

Rural local government is popularly called panchayati raj (“raj” means rule). It is built in three levels, from the village up to the district:

• At the bottom is the Gram Panchayat — the council for a village (or a group of villages). It has several ward members, often called panch, and a president called the sarpanch, all directly elected by the adult voters. Watching over it is the Gram Sabha — all the voters of the village together. The Gram Sabha must meet at least twice or thrice a year to approve the panchayat’s budget and review its work. (This is the part where ordinary people directly take part.)
• A few gram panchayats are grouped into a Panchayat Samiti (also called a block or mandal).
• All the panchayat samitis in a district together form the Zila (district) Parishad, headed by a chairperson.

For towns and cities there are urban local bodies: Municipalities for towns (headed by a chairperson) and Municipal Corporations for big cities (headed by a mayor). All of these are run by elected representatives.

Figure 2.7 below shows the whole third tier — the rural ladder, the urban bodies, and the 1992 rules that gave them real life.

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This new system is the largest experiment in democracy anywhere in the world — there are now about 36 lakh elected representatives in panchayats and municipalities, more than the population of many countries. It has deepened democracy and, importantly, increased women’s voice in our politics.

But let us be honest about the difficulties too. Elections are held regularly and with enthusiasm. But Gram Sabhas are often not held regularly. Most state governments have not transferred enough powers or money to the local bodies. So we are still some distance from the true ideal of self-government. The structure is in place; making it fully alive is still work in progress.

Common Mistakes

Now that the concepts are clear, here are the traps students most often fall into. For each, notice why the wrong idea feels so tempting — that is what protects you from it.

Quick Check

Practice Problems

Easy

Medium

Challenge

Summary

You should now be able to explain:

• Federalism is a system where power is divided between a central authority and smaller units (states), with two or more tiers of government that all rule the same citizens — but each tier has its own jobs, and each tier’s powers are guaranteed by the Constitution.
• In a unitary system one centre holds all power and the units take orders; in a federal system the centre cannot order a state around in its own sphere, and both answer to the people.
• Key features: two-plus tiers; same citizens but separate jobs; powers written in the Constitution; no one-sided changes; courts as umpire; each level has its own money; and the double goal of unity plus diversity.
• There are two routes: coming-together federations (USA, Switzerland, Australia — states strong and equal) and holding-together federations (India, Spain, Belgium — centre stronger, some states special). India is holding-together.
• The Constitution divides law-making into the Union List (national subjects — only the Union decides), the State List (local subjects — only the state decides) and the Concurrent List (shared subjects — both decide, but the Union law wins if they clash). Left-over (residuary) subjects go to the Union.
• Some states have special status (e.g. under Article 371); some small areas are Union Territories run mainly by the centre. The power-sharing arrangement is hard to change by design.
• Federalism is made to work through linguistic states (1956) — which reduced conflict by removing grievances; a careful language policy — Hindi as official (not national) language, 22 Scheduled Languages, no forcing of Hindi; and better centre-state relations after 1990, helped by coalition governments and the courts.
• Decentralisation added a third tier of local government. The 1992 (73rd and 74th) amendments made it real: compulsory regular elections, reservation for SC/ST/OBC and one-third seats for women, a State Election Commission, and sharing of powers and money via a State Finance Commission. Rural panchayati raj runs Gram Panchayat → Panchayat Samiti → Zila Parishad, with the Gram Sabha; towns have municipalities and corporations.

What’s Next

You have now seen how India shares power between levels of government to manage its diversity of regions and languages. But diversity is not only about regions. People also differ — and are sometimes treated unequally — on the basis of gender, religion and caste. The next chapter, Gender, Religion and Caste, asks how these social divisions enter politics, when that is healthy and when it is harmful, and what democracy does about inequality between men and women, between religious communities, and between caste groups. It is the natural next step: from sharing power between places to sharing power fairly between people.