In recent times, the Union Government has introduced significant changes in Centre-State relations, with both cooperative and contentious elements. These changes reflect shifts in policy implementation, fiscal arrangements, and political dynamics that have implications for India's federal structure.

Key Changes in Centre-State Relations

1. Fiscal Federalism and the Role of the Finance Commission: The 15th Finance Commission, whose recommendations are applicable for 2021–2026, made some important changes in the distribution of tax revenue between the Centre and States. One major change is the reduction in the share of taxes to be devolved to states from 42% to 41% to accommodate the financial needs of the newly created Union Territories of Jammu & Kashmir and Ladakh. Additionally, the Finance Commission introduced performance-based incentives for states on various criteria like maintaining fiscal discipline, demographic performance, and improving governance.

2. GST Compensation: The Goods and Services Tax (GST) regime has fundamentally altered Centre-State fiscal relations. Initially, the Union Government assured states of compensation for any revenue loss due to the implementation of GST. However, disputes arose when the Centre delayed the release of compensation to states, particularly during the pandemic, leading to strained relations. To address the shortfall, the Centre allowed states to borrow, but this has created fiscal tensions.

3. Interference in State Jurisdiction: States have expressed concerns over increasing centralization of power, particularly in areas traditionally under state jurisdiction. The Union government has passed several laws affecting agricultural marketing (Farm Laws, now repealed), labor laws, and land acquisition, areas largely under state control. Additionally, the unilateral changes in Jammu & Kashmir’s status (2019) and the frequent invocation of Article 356 (President’s Rule) have raised concerns about encroachments on state autonomy.

4. NITI Aayog and Governance Mechanisms: The role of the NITI Aayog, which replaced the Planning Commission, is crucial in fostering cooperative federalism. The Centre has emphasized cooperative federalism, with NITI Aayog playing a coordinating role in development strategies, ensuring that states participate in policy formulation. However, some states feel that their autonomy in planning has been reduced under the NITI Aayog's more centralized approach.

5. Centre's Role in Crisis Management: During the COVID-19 pandemic, the Centre took several steps that impacted state autonomy. For instance, decisions on lockdowns, vaccine distribution, and management of migrant labor were heavily influenced by the Centre, at times overriding state prerogatives. This has led to debates on the balance between state autonomy and national coordination during emergencies.

Measures to Strengthen Centre-State Relations and Federalism

To build trust between the Centre and the States and to strengthen India's federal structure, several steps can be recommended:

1. Restoring Fiscal Federalism: The Centre must ensure that financial devolution to states, particularly in terms of GST compensation, is timely and adequate. Any fiscal measures, such as changes in revenue-sharing formulas or the imposition of cess and surcharges (which are not shared with states), should be discussed transparently with state governments to maintain fiscal trust.

2. Strengthening Institutional Mechanisms: Institutions like the Inter-State Council, which is meant to foster dialogue between the Centre and the states, should be revived and used regularly. Such bodies can resolve disputes over legislative jurisdiction and policy implementation, creating a platform for cooperative federalism.

3. Addressing State Concerns on Legislation: The Union government should engage in greater consultation with states, especially when legislating in areas that directly impact state subjects like agriculture, labor, and land acquisition. The process of legislating on Concurrent List items should ensure that states have a stronger say in policy.

4. Improving Federal Coordination During Crises: The Centre should adopt a more consultative and collaborative approach when managing national crises like pandemics or natural disasters. A model of joint decision-making where both the Centre and states have clearly defined roles and shared responsibilities would help in smooth functioning and foster trust.

5. Judicial Safeguards and Constitutional Reforms: To strengthen federalism, states have often called for reforms in the power distribution under the Constitution. While radical changes may not be immediately feasible, a more balanced approach to constitutional provisions like Article 356 (President's Rule) could prevent its misuse. Ensuring judicial safeguards to protect state autonomy and resolving disputes through constitutional mechanisms like the judiciary would strengthen federalism.

6. Decentralization and Local Governance: Strengthening local governance through Panchayati Raj Institutions and urban local bodies can reduce the friction between the Centre and states. Decentralization would allow states greater control over local issues, making governance more efficient and reducing the need for direct intervention by the Centre.

Conclusion

The relationship between the Centre and states in India has seen both collaboration and conflict, particularly as federalism adapts to contemporary challenges. To ensure a harmonious Centre-State dynamic, there needs to be respect for constitutional boundaries, financial fairness, and effective institutional mechanisms that promote dialogue and cooperative governance. These measures can ensure that federalism in India remains robust and adaptable to future challenges.

Recent Changes in Centre-State Relations:

The Union Government has introduced several changes in the domain of Centre-State relations in recent times, some of which have been met with controversy and have raised questions about the nature of India's federal system. Some of these changes include:

• Increased Centralization: The government has been accused of increasing centralization by utilizing executive orders and ordinances to implement policies without proper consultation with the states. This has been seen in areas like agriculture, education, and taxation.
• Financial Control: The government has tightened control over state finances through the GST council and by imposing conditions on central grants to the states. This has raised concerns about fiscal autonomy of states.
• Policy Intervention: The government has intervened in the policy domains of states through the implementation of centrally-sponsored schemes, often bypassing existing state-level initiatives. This has been criticized as overriding state autonomy and undermining state-specific needs.
• Centralized Governance: The government has implemented several measures to centralize administrative power, including appointing central officers to state positions and merging departments. This has been perceived as a threat to state governance and local autonomy.
• Political Interference: The government has been accused of interfering in the functioning of state governments, especially those led by opposition parties. This has raised concerns about political neutrality and respect for democratic processes.

Measures to Build Trust and Strengthen Federalism:

To address these concerns and build trust between the Centre and the States, several measures can be adopted:

1. Strengthening Inter-Governmental Dialogue:

• Regular meetings: Implement regular meetings between the Centre and state governments, including the Prime Minister, Union Ministers, and Chief Ministers.
• Inter-state councils: Strengthen the role and effectiveness of inter-state councils to facilitate dialogue and consensus-building on key issues.
• Joint Working Groups: Establish joint working groups at the ministerial level to address specific policy issues and find mutually agreeable solutions.
• Transparent communication: Ensure open and transparent communication between the Centre and states through regular briefings, reports, and updates.

2. Enhancing Financial Autonomy:

• Increased devolution: Increase the devolution of financial resources to states through a revised formula based on objective criteria and needs.
• Flexible GST regime: Introduce greater flexibility in the GST regime to enable states to raise revenue based on their unique economic characteristics.
• Reduced reliance on grants: Gradually reduce reliance on conditional grants and focus on providing block grants to states for greater autonomy in spending.
• Strengthened fiscal institutions: Strengthen state-level fiscal institutions to ensure greater accountability and efficient utilization of financial resources.

3. Respecting State Autonomy:

• Consultation and consensus: Consult with states before implementing major policies affecting them, particularly in areas like education, healthcare, and agriculture.
• Respecting state-specific needs: Acknowledge and address the unique needs and priorities of different states in policy formulation and implementation.
• Collaborative governance: Encourage collaborative governance through joint initiatives, sharing of best practices, and support for state-led programs.
• Empowering local governments: Empower local governments through greater devolution of power and resources to enhance their role in service delivery.

4. Promoting Cooperative Federalism:

• Inter-state coordination: Promote inter-state coordination and collaboration on shared concerns like climate change, disaster management, and economic development.
• Shared learning and capacity building: Encourage the sharing of best practices and expertise among states to foster mutual learning and improvement.
• Empowering state institutions: Strengthen state-level institutions and empower them to effectively discharge their responsibilities and contribute to national development.
• Addressing inter-state disputes: Establish clear and efficient mechanisms to resolve inter-state disputes through dialogue and arbitration.

These measures can go a long way in strengthening India's federal structure, promoting cooperative governance, and building trust between the Centre and the States. By ensuring a true partnership based on mutual respect, transparency, and collaboration, India can leverage the collective strength of its federal system to achieve its full potential.

Recently, the Union Government has introduced several changes in the domain of Centre-State relations, including:

1. GST Council: The Goods and Services Tax (GST) Council, a constitutional body, has been established to ensure cooperative federalism in taxation. The Council has representatives from the Centre and States, and decisions are taken through a collaborative process.
2. NITI Aayog: The National Institution for Transforming India (NITI Aayog) has replaced the Planning Commission, with a more advisory role, allowing States to have more autonomy in planning and decision-making.
3. ** Cooperative Federalism**: The Union Government has emphasized cooperative federalism, encouraging States to take ownership of development initiatives and promoting a spirit of mutual cooperation.
4. Devolution of Funds: The 14th Finance Commission has recommended a higher devolution of funds from the Centre to States, giving them more autonomy in allocating resources.
5. Swachh Bharat Mission: The Union Government has introduced the Swachh Bharat Mission, a collaborative effort between the Centre and States to achieve a clean India.

To build trust between the Centre and States and strengthen federalism, the following measures can be adopted:

** Measures to build trust: **

1. Regular Dialogue: Institutionalize regular dialogue between the Centre and States through mechanisms like the Inter-State Council and the NITI Aayog.
2. Delegation of Powers: Delegating more powers to States in areas like education, healthcare, and infrastructure development can foster ownership and accountability.
3. Transparency and Accountability: Ensure transparency in decision-making and allocation of funds, and establish mechanisms for accountability to prevent misuse of funds.
4. ** Capacity Building**: Capacity building programs for State government officials can enhance their capabilities to implement projects and policies effectively.

** Measures to strengthen federalism: **

1. Codify the Roles: Codify the roles and responsibilities of the Centre and States to avoid overlap and ensure clarity in governance.
2. Fiscal Federalism: Implement fiscal federalism by devolving more funds to States and giving them more autonomy in fiscal management.
3. Regional Councils: Establish regional councils to facilitate coordination and cooperation among States on regional issues.
4. Decentralization: Decentralize decision-making to the lowest possible level, enabling local governments to respond to local needs and aspirations.
5. Institutional Reforms: Implement institutional reforms to ensure that the Centre and States have robust institutional mechanisms in place to facilitate effective governance and coordination.

By implementing these measures, the Union Government can strengthen federalism, build trust, and promote cooperative governance between the Centre and States, ultimately leading to more effective and efficient governance in India.