The Union government has introduced key reforms in center-state relations aimed at promoting cooperative federalism, enhancing fiscal autonomy, and resolving interstate disputes. Strengthening federalism requires building trust through transparent mechanisms, financial devolution, and collaborative governance frameworks.

Q13. What changes has the union government recently introduced in the domain of center- state relations ? Suggest measures to be adopted to build the trust between the center and the states and for strengthening federalism. 

Model Answer:

Introduction

Center-state relations in India reflect the dynamic interplay between the central government and state authorities, influencing policy implementation and governance. This relationship is shaped by constitutional provisions, political realities, and socio-economic contexts.  

Body

Recent Changes in Center-State Relations

• Greater central control in taxation and resource allocation: The GST reform has reduced states' flexibility in taxation policies, centralizing revenue collection mechanisms. 
• Financial devolution: States' share increased from 32% to 42%. The increase in states' share of central taxes has provided more fiscal autonomy to states for development initiatives.
• Centrally Sponsored Schemes: The rationalization of Centrally Sponsored Schemes has allowed states more flexibility in implementation and fund allocation. For example,  under PMGSY states are given flexibility in road construction standards.  
• Centralization of administrative powers through All India Services IAS officers: central deputation rules were modified in 2022. 
• Introduction of Government of National Capital Territory (Amendment) Act: It enhances central government power, creating a rift between Delhi's autonomy and federal principles.
• The National education policy, 2020: The National Education Policy (NEP) 2020 impacts state autonomy in education governance. 
• The Electricity (Amendment) Bill, 2022: Centralizes electricity distribution and regulation. Rajasthan and Tamil Nadu opposed the bill, arguing it restricts states' ability to regulate local electricity tariffs and policies. 
• NIA Amendment Bill: It expands the agency’s jurisdiction, raising concerns over state sovereignty in law enforcement. 

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Measures to build trust and strengthen federalism:

To strengthen federalism and build trust between the center and states, the Punchhi and Sarkaria Commissions emphasize cooperative governance and constitutional reforms - 

• Regular Inter-State Council meetings: Only 11 meetings held since 1990; increase frequency.  Conducting regular Inter-State Council meetings can foster better communication and cooperation between the center and states.
• Strengthen fiscal federalism: Providing more untied funds to states can enhance their autonomy in allocating resources based on local needs. Rationalization of centrally sponsored schemes from 66 to 28 is a step in the right direction. 
• Encourage state-specific policies and local governance : Recognizing state-specific needs and implementing tailored policies can address regional disparities effectively. 
• Establish permanent secretariat: A permanent secretariat can ensure continuous dialogue and resolution of center-state issues. 
• Enhance state participation in NITI Aayog decision-making: Ensuring state representation in key decisions of NITI Aayog would strengthen cooperative frameworks and ensure that central policies align with local development goals. 

Conclusion

To strengthen federalism and restore balance in center-state relations, it is essential to implement recommendations from the Punchhi and Sarkaria Commissions. Regular dialogue, increased fiscal autonomy, and state-specific policies can bridge the gap between different levels of governance. By prioritizing cooperative frameworks, India can ensure that both the center and states work together effectively for holistic national development. 

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