Challenges to India's Centralized Parliamentary Federalism

Abstract

Indian federalism has become less centralized as a result of popular pressures, the breakdown of Congress dominance, and the fragmentation of political parties. Economic challenges to cooperative federalism emerge from market reforms, the search for investments, and the World Bank structural adjustment plans adopted in selected states. Devolution of economic decision-making to the states aggravates fiscal crises by facilitating populist political strategies and accentuating uneven development. Political challenges arise from issues such as central vs. state control of police and security forces; movements for the creation of new states; and the implementation of constitutional provisions for village-level governance. Change in India's federalism has come about less through the adaptation of formal institutions than through the proliferation of state-based political parties, aggregating varied interests based on region, language, caste, class, or views on secularism. After the elections of 1999, more than 20 parties managed to provide a stable national coalition government, transforming the political process. A national multiparty coalition again formed the government following the elections of 2004.