Political and Fiscal Challenges

The process of evolution of Indian federalism has been influenced, by political development, including rise of regional identities, end of a one-party dominant era, and judicial interpretations of the Constitution.

This article will further discuss the myriad political and fiscal problems faced by India. The information from this article will be of immense use of candidates when they attempt the polity segment of the IAS Exam.

Domestic ethnic, religious, linguistic, group demands

Two strict rules have opened followed since Independence in dealing with dissident domestic ethnic, religious, linguistic, and cultural group demands. First, no secessionist movement will be entertained and that any group which takes up a secessionist stand will, while it is weak, be ignored and treated as illegitimate, but should it develop significant strength, be smashed, with the help of the armed forces if necessary. Religious minorities were free to preserve their own law and practice their religion as they see fit, but not to demand either a separate state for their community even within the Indian Union or separate electorates or any form of proportional representation in government bodies. Any such demand would not be considered legitimate.

For more UPSC notes on Polity, visit the linked article

Cultural and linguistic differences

While political and economic conflicts develop centre-state conflict dimensions of their own, conflicts involving linguistic and cultural (and even communal) dimensions have tended to assume significance under certain circumstances. Demands for an equitable distribution of political power and privileged access for the weaker regions to economic resources are often couched in the language of demands for greater autonomy for the different states as well as for a more generous investment of the central plan resources in regions far away from the ‘heartland.’

India’s parliamentary federalism and coalition politics

The relationship between India’s parliamentary federalism and coalition politics somewhat becomes a mainstay.  The distinction between national and state parties is not on the basis of the arena in which they compete. Most of them compete in both assembly and parliamentary elections. Since the states in India differ vastly in terms of population and size, they play for different stakes in Parliament. With their increasing importance at the national level, they have been able to minimize the manoeuvrability and discretion of the centrist parties.

Economic reforms and the phenomenon of globalization

A new shift has occurred in the economic domain also. The path of development which India undertook in the initial years of the post-Independence period has undergone a change now with India undertaking to reform its economy through liberalization. Economic reforms and the phenomenon of globalization has necessitated an examination of India’s federal system, especially when all the layers of federations now simultaneously interact with foreign governments and corporations in the global economy.

To know the difference between Globalization and liberalization, visit the linked article.

The emergence of Interest Groups

Since the late 1960s, things have become more difficult on both the sociocultural and political fronts. On the one hand, interest groups have crystallized identities along with language, culture and religion. With the growing awareness of their political concerns, these groups have pressed harder for resources, power and respect and have exhibited impatience with mere tokenism. On the other hand, political decay has acted most formal and informal political institutions mainly due to the attempts by politicians to erode the substance and autonomy of institutions in the interest of personal rule, creating a crisis in ‘management’ techniques and sowing the seeds of frustration among organized interests. The result has been the production of far more strife of a destructive sort.

Find UPSC Mains Polity Questions by visiting the linked article


Federalism, in the Indian context, remains a potent concept despite failing in some cases to keep its promise of providing a democratic institutional mechanism for its diverse society. Despite its shortcomings, it remains the best hope for governing a territorially diverse and pluralistic society like India. Its ability to make the centre strong as well as sustain itself in view of the growing demands for regional and group autonomy gives it unique flexibility, and hence, is its strength. The only requirement in the present time is to ensure the sharing of resources and opportunities with different ethnic and cultural groups and communities as well to reconcile democratic polity with increasing democratization of society. In short, federal India needs only to contemporize itself.

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