8. A Case for Structural Reset: Recalibrating Union-State Relations

Summary of Key Highlights • The \'Structural Reset\' Thesis: Modern Indian federalism operates under a \'centralizing bias\' originally designed in 1950 to address post-Partition anxieties. Arguments now favor \'right-sizing\' the Union to allow it to focus on national security and foreign policy while restoring autonomy to politically mature states. • The Justice Kurian Joseph Committee (2026): Constituted by the Tamil Nadu government in April 2025, this High-Level Committee submitted Part I of its report on February 16, 2026. It marks the fourth major review of Union-State relations after the Rajamannar (1971), Sarkaria (1988), and Punchhi (2010) commissions. • Subsidiarity as a Governance Pillar: The report emphasizes the principle of subsidiarity—that authority is most effective when exercised closest to the people. It warns that central micromanagement of state subjects (like health and education) breeds administrative fragility and duplication.• States as Laboratories of Democracy: History shows successful national policies often originate as state experiments. Examples include Tamil Nadu’s Noon Meal Scheme, Kerala’s literacy models, and Maharashtra’s employment guarantee, proving that decentralized innovation precedes national adoption. • Legislative Overreach & Concurrent List: A significant point of friction is the Union’s use of \'subordinate legislation\' to override plenary state laws in Concurrent List subjects, effectively turning states into mere administrative extensions of New Delhi. • Capacity through Accountability: The report rejects the \'lack of state capacity\' argument, asserting that true capacity arises from responsibility and the freedom to manage regional diversity, rather than intrusive central oversight. Key Definitions • Centralizing Bias: A constitutional design that favors the Union government, justified during India\'s formative years to ensure national integration and prevent secessionist tendencies. • Right-Sizing the Union: A reformative concept where the Union government sheds non-core responsibilities (like rural sanitation or primary health) to focus exclusively on national-level strategic priorities. • High-Level Committee on Union-State Relations (2025-26): A 3-member panel chaired by Justice Kurian Joseph (Retd.), with members K. Ashok Vardhan Shetty (Retd. IAS) and Dr. M. Naganathan, tasked with reviewing federal challenges. Constitutional & Legal Provisions • Article 1: Defines India as a \'Union of States,\' implying an indissoluble Union but composed of essential, autonomous constituent units. • Article 246 (Seventh Schedule): Distributes legislative powers between the Union List, State List, and Concurrent List. The current debate focuses on the \'creeping\' expansion of the Union into State List subjects. • Article 263 (Inter-State Council): A constitutional body intended for coordination; the Kurian Joseph report advocates transforming it from a \'talk-shop\' into a mandatory consultative forum for Concurrent List laws. • S.R. Bommai vs. Union of India (1994): The Supreme Court landmark judgment declaring Federalism as part of the Basic Structure of the Constitution. • Subordinate Legislation (Article 13/73): Used by the Union Executive to issue rules and templates for Centrally Sponsored Schemes (CSS) that often override regional policy contexts. Comparative Evolution of Federal Reviews

Important Keypoints for UPSC • Fiscal Federalism Challenges: Concerns over the increasing use of Cesses and Surcharges (nondivisible pool) by the Union, which rose to over 18% of gross tax revenue by 2025, depriving states of their fair share under Article 270. • Governor’s Role: Recurring friction in Tamil Nadu and Kerala over the indefinite withholding of Bills; the report echoes the demand for constitutional timelines for gubernatorial assent. • Delimitation 2026: Southern states fear a loss of political representation in Parliament if seat reallocation is based purely on current population trends, potentially penalizing states that effectively implemented family planning. • Institutional Dependency: The transition from MGNREGA to the Viksit Bharat (Gramin) Act (2025) is cited as an example of rigid central templates hampering state-specific rural planning. Conclusion The call for a structural reset is not a demand for a weaker Union, but for a more focused one. By moving away from \'High Command Federalism\' toward a partnership-based enterprise, India can leverage its regional diversity as a competitive advantage. As Justice Kurian Joseph\'s report suggests, a Union is strong not when it controls everything, but when it is focused on national goals and trusts its states to lead local progress. UPSC Relevance • GS Paper II: Federal structure and its challenges; Devolution of powers and finances up to local levels and challenges therein; Functions and responsibilities of the Union and the States. • GS Paper III: Issues relating to planning, mobilization of resources, and economic growth; Fiscal federalism and GST. • Essay: \'Federalism as a tool for National Unity\' or \'The paradox of a strong Centre and weak States.\'