Impact of Centralisation on Federal Structure – UPSC GS2

Utility: There are some good examples which can be quoted in answers related to Federalism and Centre-State Relations
Centralisation and Political federalism:
There is a growing incursion of the Union government into sectors where State governments have a primary responsibility. For instance,
  • Resource Allocation : There has been increasing centralisation in resource allocations and welfare interventions. For instance, GST has negatively impacted the finances of State governments.
  • Interference in State Subjects: Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health. For example, NEET exam, meddling with the appointments of vice-chancellors in universities funded and run by State governments etc. It subverts the affirmative action policies developed at the regional level in response to local political demands.
  • Bypassing State Governments: Centre is increasingly ignoring elected representatives of State governments. It is holding direct meetings with State secretaries and district collectors on issues that are primarily under State control. It subverts the Constitutional arrangement of Power-sharing between Centre and State.
Centralisation and Economic Federalism:
  • Nepotism and crony capitalism. Big businessmen are getting benefits from the government.
  • Apathy towards small businesses. The centre had strongly supported the Indian big business from global competition by side lining the Regional Comprehensive Economic Partnership (RCEP). In contrast, the government has eroded the power of small businesses through GST and the call for a single national market.
  • Restricting the political funding for regional parties. Regional parties rely on region-specific rent-thick sectors for political funding, such as mining and real estate. The ruling party has curtailed this by levelling corruption allegations and the use of central agencies against businesses supporting the regional parties. This weakens the ability of regional parties to compete with the ruling party electorally.

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