Q.13. What changes has the Union Government recently introduced in the domain of Centre-State relations? Suggest measures to be adopted to build the trust between the centre and the States and for strengthening federalism. [UPSC 2024 GS P-2]

In recent times, the Union Government of India has introduced several changes and initiatives that have affected the domain of Centre-State relations. These changes reflect both the centralization of powers in certain areas and the increasing need for cooperative federalism. While some of these measures have faced criticism for undermining federalism, others are aimed at improving governance coordination between the Centre and the States.

Recent Changes in Centre-State Relations:

1. Fiscal Federalism:
   • Goods and Services Tax (GST): The introduction of the GST regime in 2017 was a significant reform affecting Centre-State fiscal relations. Although it unified indirect taxes, there have been disputes over compensation payments to states due to revenue shortfalls. States have raised concerns about delayed GST compensation, which impacts their fiscal autonomy.
   • Finance Commission Recommendations: The 15th Finance Commission’s recommendation to alter the criteria for revenue-sharing, emphasizing population over other parameters like fiscal discipline, has been contentious. States with smaller populations have objected, seeing it as a potential reduction in their share of central funds.
2. NITI Aayog:
   • The NITI Aayog replaced the Planning Commission in 2015 with the aim of fostering cooperative federalism. The Aayog seeks to involve states in the national planning process and promote collaboration. However, some states have expressed concerns about the lack of financial allocations through this mechanism, unlike the earlier Planning Commission.
3. Use of Governor’s Office:
   • There have been allegations that the office of the Governor is being used to influence state politics, especially in opposition-ruled states. The Governor’s role in summoning and proroguing state assemblies has been criticized as a violation of the principles of federalism.
4. Farm Laws and Agriculture:
   • The Three Farm Laws introduced in 2020, though repealed in 2021, were criticized for bypassing the states’ authority on agriculture, a subject traditionally within the state list under the Constitution. States argued that these laws encroached on their jurisdiction.
5. Strengthening National Security Laws:
   • The Union Government has taken measures to centralize laws on internal security by empowering central agencies like the National Investigation Agency (NIA) to operate without prior state consent. This move has been seen as an encroachment on the state’s law and order domain, which is a state subject under the Constitution.
6. Governor’s Consent for Bills:
   • Delays in providing assent to state bills by Governors have raised questions about the friction between Centre and States. Instances in states like West Bengal, Tamil Nadu, and Kerala have highlighted tensions over bills passed by state assemblies awaiting the Governor’s signature.

Measures to Strengthen Trust Between Centre and States and Promote Federalism:

1. Strengthening Fiscal Autonomy:
   • Ensure timely GST compensation to states, and review the compensation mechanism in consultation with states to address their concerns regarding fiscal autonomy.
   • Reconsider the revenue-sharing formula in the Finance Commissions to ensure that states with smaller populations or special needs are not disadvantaged.
   • Empower states to raise more resources independently through fiscal reforms, such as allowing more autonomy in setting local taxes.
2. Cooperative Federalism through NITI Aayog:
   • Strengthen the role of NITI Aayog as a platform for dialogue between the Centre and States. It should have the capacity to allocate funds based on states’ developmental needs and performance, as the Planning Commission once did.
   • Create more institutionalized channels of communication between the Union Government and states to address regional concerns and reduce political tensions.
3. Limiting the Governor’s Discretionary Powers:
   • There should be clear guidelines limiting the discretionary powers of Governors, particularly in politically sensitive situations like summoning and dissolving state assemblies or withholding assent to state legislation.
   • States should have a greater say in the appointment of Governors, and Governors should act strictly within the constitutional framework, without political influence.
4. Reviving the Inter-State Council:
   • Regularize meetings of the Inter-State Council, a constitutional body that promotes dialogue between the Centre and States. This would create a formal platform to resolve inter-state and Centre-State disputes.
   • Make the Zonal Councils more effective by holding more frequent meetings and ensuring follow-ups on decisions taken.
5. Decentralization in Policy-Making:
   • In areas where states have constitutional authority, such as agriculture, education, and public health, the Centre should adopt a more consultative approach. Laws impacting these sectors should be discussed extensively with the states before enactment.
   • Policies related to regional development should factor in the local aspirations and priorities of states to avoid central overreach.
6. Promoting Federalism in the Legislative Process:
   • Ensure that state assemblies are consulted more extensively when drafting legislation that affects subjects on the Concurrent List.
   • Strengthen the role of Rajya Sabha, as it represents the states in Parliament, in reviewing legislation that affects states’ powers.
7. Judicial Safeguards:
   • Encourage the judiciary to act as a neutral arbiter in Centre-State disputes by ensuring speedy resolutions of cases concerning the division of powers.
   • Enhance constitutional safeguards through amendments to limit encroachments on state authority in areas like agriculture, law and order, and public health.

Conclusion:

The evolving nature of Centre-State relations requires ongoing dialogue and collaboration to ensure the functioning of Indian federalism. Restoring trust between the Centre and the States can be achieved by respecting the principles of cooperative federalism, ensuring fiscal fairness, and maintaining clear boundaries on subjects of governance. By empowering states and involving them in policy-making, India can strengthen its federal structure and create a more balanced relationship between the Union and its constituent units.