Rethinking Federalism: Changing Power Relations Between the Center and the States

India's federalism during the last 50 years had two phases: three decades of centralized federalism followed by cooperative and competitive federalism. Unitary features of India's Constitution and planned development led to strong central dominance in the first phase, with the states in a subordinate position. The momentum of impressive initial growth did not last. The late 1970s saw a weakened Congress party, the emergence of coalition politics, and a shift in the Center-states power balance. Growth followed liberalization and moves toward decentralization, but this was accompanied by an accentuation of regional disparities and fiscal imbalances. A major factor in the negative results has been weaknesses in the intergovernmental transfer system. Desirable reforms, which maintain moves toward decentralization and greater states' autonomy, are explored here.