Centre must learn to share

The real energy of Indian democracy now flows from the states. The Union’s strength lies not in control, but in confidence. The real energy of Indian democracy now flows from the states. Yet Delhi’s urge to centralise every rupee and reform risks suffocating that vitality. The Union’s strength lies not in control, but in confidence.From Telangana’s farm support model to Tamil Nadu’s welfare architecture, from Gujarat’s industrial drive to Kerala’s public health ethos, India’s states are no longer silent implementers of central policy — they are authors of their own destinies.

When the Constitution was framed, it gave the Union extraordinary powers over its constituent states. Yet over the years, the balance has tilted. The economic liberalisation of the 1990s decentralised economic power, and the constitutional amendments that empowered local bodies entrenched participatory governance. The collapse of the single-party system and the rise of coalition politics further transformed the equation between Delhi and the regions.

But the new wave of regionalism is different. It is not merely political bargaining for ministerial portfolios in coalition cabinets. It is about policy autonomy — the belief that states can innovate, experiment and succeed on their own terms. Telangana’s Rythu Bandhu scheme, Kerala’s human development model, Tamil Nadu’s focus on universal welfare, Gujarat’s infrastructure push, Sikkim’s organic experiment — these are distinct, ideologically diverse models that share one thing: confidence.

India’s growth story, once driven by central planning, now runs on multiple tracks. A health policy tested in Thiruvananthapuram may inspire Delhi; an industrial incentive from Ahmedabad may ripple into Lucknow. This is federalism in motion.

Yet this newfound dynamism has opened deep fissures in India’s fiscal foundations. The introduction of the Goods and Services Tax (GST) in 2017 was supposed to simplify taxation and strengthen national integration. Instead, it has exposed the limits of trust between the Centre and the states. For five years, the Union promised to compensate states for revenue shortfalls. When that window closed in 2022, many states felt abandoned, their fiscal autonomy eroded and their planning cycles upended. The Centre extended cess collections and offered loans, but the politics of resentment had already taken hold.

This is not simply an argument about tax revenue; it is about control. When the financial umbilical cord runs one way, the rhetoric of “cooperative federalism” begins to ring hollow. Southern states, in particular, now bristle at what they see as structural unfairness in revenue devolution. Their complaint is simple but powerful: why should states that have succeeded in controlling population growth and improving social outcomes be penalised for it? The formulas of the Finance Commission, still weighted heavily by population, have reignited that grievance.

Beyond money, the tension is political. The Centre’s frequent use of governors, centrally controlled agencies and investigative bodies in state affairs has deepened the sense of imbalance. Opposition-ruled states complain of interference; the ruling party insists it is enforcing accountability. Either way, the relationship has grown brittle.

Yet in this confrontation lies a democratic vitality. The states are no longer passive recipients of national policy. They have become the frontline of political innovation — and of resistance. Regional leaders now speak not only for their constituencies but for competing visions of India. The rise of regional parties is not a sign of disunity; it is the mark of a maturing democracy where governance and identity are negotiated locally as well as nationally.

This “performance politics” has changed the electoral grammar of the Republic. States now compete on education outcomes, infrastructure projects and investment summits. Uttar Pradesh and Maharashtra race to build expressways; Tamil Nadu and Karnataka vie for semiconductor investments. This competitive federalism, if managed with fairness and transparency, can lift the national tide. But when it degenerates into partisan sabotage or fiscal coercion, it threatens the Union’s integrity.

Successive governments have promised “cooperative federalism”, yet the phrase has become a polite disguise for centralisation. When NITI Aayog replaced the Planning Commission in 2015, it was hailed as a new era of consultation. In practice, however, it has little fiscal power and often functions as an advisory body with limited influence.

True cooperation demands shared decision-making, not token consultation. The Inter-State Council should be revitalised, Finance Commissions made more independent, and fiscal transfers linked to efficiency and innovation rather than raw demography. States must have a genuine voice before major national schemes are rolled out — not merely an invitation to rubber-stamp decisions already made.

Regionalism, of course, is not without its perils. The assertion of local pride can easily slip into narrow provincialism. Language, religion and ethnicity remain volatile markers of identity. The resistance to Hindi imposition in the South, the politics of citizenship and migration in the North-East, and debates over resource allocation in mineral-rich states all reveal how easily autonomy can mutate into alienation.

But the solution is not to suppress difference; it is to manage it. India’s genius has always been its capacity to hold contradictions together. The Union does not need uniformity to survive — it needs empathy, trust and fair rules of engagement. The goal should be not to dilute state power but to ensure it strengthens the national fabric.

As India marches towards its centenary as an independent nation, it faces a simple but profound question: can a country of 1.4 billion be governed effectively without empowering its sub-nations? The answer must be yes — but only if federalism evolves from a hierarchy into a partnership.

The Centre must resist the temptation to command; the states must resist the impulse to withdraw. Fiscal responsibility, political maturity and institutional respect are the three pillars of a sustainable federal order. India’s success in the coming decades will depend on how well these are balanced.

The new regionalism is not a threat; it is an opportunity. It signals that Indian democracy is no longer top-down but multi-centred, that power is being re-imagined as a shared enterprise rather than a monopoly. The rise of the states may unsettle old hierarchies, but it also holds the promise of a more responsive and resilient Union.

If the 20th century was about stitching India together, the 21st must be about letting it breathe. Federalism, at its best, is not a battle for supremacy but a conversation about belonging. India’s unity has never come from sameness; it has come from the harmony of its differences. The task now is to ensure that this chorus of states sings in tune — confident, distinct, and proudly part of one nation.