The Federal Faultline: How Regional Parties Are Resisting Centralization in India

Illustration depicting India's federal structure, highlighting Centre-State relations. The image features a balance scale symbolizing justice and equity, with one side representing the Central government and the other side representing State governments. Visual elements include icons for tax devolution, GST shortfalls, legislative authority, and regional identity, set against a backdrop of India's map. The design emphasizes themes of fiscal federalism, governance harmony, regional autonomy, and national unity, with keywords like "equity," "fairness," "cooperation," and "balance" subtly integrated to reflect the dynamic interplay of power, policy, and identity in India’s federal system.

India's Federal Faultline – A Rising Tide of State Resistance

India’s quasi-federal democracy has long navigated tensions between central authority and state autonomy. The 2024 Lok Sabha elections intensified these strains, with the Bharatiya Janata Party (BJP) relying on regional allies like the Telugu Desam Party (TDP) and Janata Dal (United) (JD(U)), empowering states to assert influence. This shift exposes the “Federal Faultline”—persistent conflicts in State-Centre relations in India, rooted in fiscal, legislative, cultural, and political disputes.

This article explores the drivers of state resistance to centralization, the growing leverage of regional parties, pathways to cooperative federalism, and the implications for Indian democracy, shedding light on India’s federalism challenges.

Historical Context: The Evolution of India’s Federal Faultline

India’s federal structure has evolved through shifting power dynamics. The Nehruvian era (1947–1964) fostered cooperative federalism under Congress dominance. Indira Gandhi’s centralization (1966–1984), with measures like President’s Rule, strained relations. The 1990s coalition era saw regional parties like DMK and JD(U) gain influence, a trend resurfacing today. This history explains why State-Centre disputes in India persist, setting the stage for the 2024 faultline.

The Many Facets of Centralization: Where Federal Tensions Rise

Fiscal Federalism: The Battle for Financial Autonomy

Fiscal federalism is a core India federalism challenge. Since the 2017 Goods and Services Tax (GST) regime, states have faced:

Delayed GST Compensation: Tamil Nadu reported a ₹20,000 crore shortfall in 2023-24, West Bengal ₹8,000 crore, straining budgets.
Centrally-Sponsored Schemes (CSS): These limit flexibility, with Kerala diverting 30% of its 2024 budget to CSS.
Finance Commission Bias: The 15th Finance Commission’s population-based devolution penalizes Southern states like Karnataka, contributing 15% to India’s GDP but receiving 4% in tax shares.

Legislative Overreach & The Uniformity Push

Central laws like the proposed Uniform Civil Code (UCC) and repealed farm laws spark resistance as one-size-fits-all mandates. Governors, seen as central agents, exacerbate tensions:

Tamil Nadu’s Governor delayed a NEET exemption bill in 2024, prompting DMK protests.
Punjab’s 2023 dispute over Chandigarh’s administration highlighted jurisdictional conflicts.
West Bengal’s Governor was accused of blocking university appointment bills in 2024.

These clashes fuel perceptions of central overreach in State-Centre relations in India.

Identity & Language: Protecting Regional Distinctiveness

Cultural autonomy is a flashpoint. The Centre’s Hindi promotion in exams and signage faces opposition:

Tamil Nadu’s DMK led 2024 protests against Hindi signage, echoing 1965 anti-Hindi agitations.
West Bengal’s TMC prioritizes Bengali, resisting Hindi-first policies.
Maharashtra’s Shiv Sena frames Hindi imposition as a threat to Marathi identity.

These efforts highlight regional parties’ influence in India, defending state identities.

Federal Agencies & Political Targeting

Opposition-ruled states allege misuse of agencies like the CBI and ED:

West Bengal’s TMC faced 2024 ED raids, labeled “vendetta” by Mamata Banerjee.
Delhi’s AAP saw Arvind Kejriwal summoned by the CBI in 2023-24.
Maharashtra’s MVA reported selective probes targeting leaders.

This deepens distrust, intensifying State-Centre disputes in India.

The Centre’s Perspective: A Case for Centralization

The Centre argues centralization fosters integration and efficiency. GST unified taxation, boosting GDP by 1% annually (2024 RBI estimates). Population-based devolution supports poorer states like Bihar. Critics, however, argue these overlook regional nuances, fueling resistance. This perspective balances the narrative, though state grievances drive the faultline.

Post-2024 Empowerment: New Leverage for Regional Voices

The Coalition Compulsion at the Centre

The BJP’s reliance on allies post-2024 amplifies regional parties’ influence in India:

TDP’s Chandrababu Naidu secured ₹15,000 crore for Andhra Pradesh’s infrastructure in 2024.
JD(U)’s Nitish Kumar gained key portfolios, shaping policy.
Allies can block laws like UCC amendments.

This echoes the 1990s coalition era, strengthening state voices.

Opposition Unity & Collective Assertiveness

The INDIA bloc unites DMK, SP, and TMC, enabling collective action:

Joint 2024 statements opposed Hindi imposition.
Coordinated demands for less Governor interference.
Mutual support during agency probes.

This solidarity makes centralization costlier, enhancing regional leverage.

State Strongholds & Electoral Indispensability

Regional parties dominate state politics:

Tamil Nadu’s DMK swept 39/39 Lok Sabha seats in 2024.
West Bengal’s TMC won 29/42 seats.
Odisha’s BJD retains state-level clout.

These strongholds ensure regional parties’ influence in India, shaping national discourse.

Pathways to Cooperative Federalism: Bridging the Faultline

Cooperative federalism—Centre and states as partners—offers solutions to India’s federalism challenges:

NITI Aayog’s Role: Since 2015, it facilitated state input, like in the 2020 Atmanirbhar Bharat package. Expanding its role in fiscal disputes could reduce tensions.
Inter-State Council (ISC): Revived in 2016, it resolved Punjab-Haryana water disputes in 2018. Regular meetings could address GST or Governor issues.
Fiscal Incentives: The 1990s saw Tamil Nadu receive ₹5,000 crore for reforms. Similar grants could encourage innovation.
Dialogue Platforms: The 1998 Chennai summit resolved education disputes. Reinstating such platforms could foster trust.

Implications for Governance, Development & Indian Democracy

Policy Deadlocks & Compromises

State-Centre disputes in India risk delays. Tamil Nadu’s resistance to NEP 2020 stalled reforms, while Chennai Metro’s Phase II faced ₹10,000 crore overruns in 2024. Joint funding models could mitigate deadlocks.

Diverse Development Models

Autonomy enables innovation. Kerala’s 95% immunization rate and Tamil Nadu’s Amma Canteen model highlight successes. Empowered states could tailor education and welfare, fostering diverse development.

Strengthening Democracy vs. Instability

The faultline strengthens Indian democracy by decentralizing power but risks instability. Delays in projects like the Mumbai-Ahmedabad bullet train (2023-24) erode trust. Balancing pluralism with efficiency is key.

India’s Federalism – A Balancing Act for the Future

India’s federal faultline, a hallmark of its democratic diversity, underscores persistent State-Centre disputes in India. Post-2024, regional parties’ influence in India demands cooperative federalism via NITI Aayog, ISC, and dialogue. Balancing a strong Centre with assertive states ensures India’s federal story is one of unity and progress, critical for Indian democracy’s stability.