Language, local governance and finance – the debates that defined Indian federalism

The Indian federation under Narendra Modi today is vastly different from the “union of states” imagined by the constituent assembly.

There are many aspects to this. Take the growing marginalisation of Parliament and the defiant refusal of the union government to consult with opposition leaders and chief ministers on important matters. The latest blow was the aborted attempt to thrust on the country a constitutional amendment enabling a countrywide delimitation of parliamentary constituencies and the possible reduction of seats in southern states.

Take the weak and uncertain defence of constitutional rights by the judiciary. Take the deployment of every institution including most recently the Election Commission to interrogate their citizenship. Take the conversion of the Mahatma Gandhi NREGA from a guarantee of the right to work guaranteed by the centre to a discretionary grant from the centre with major budgetary burdens on the states; and the repackaging of welfare schemes such as of food and housing from rights to the largesse of the prime minister. Take the questionable tactics of coming to power in the majority of states at all costs. Take the surge of crony capitalism. Take the criminalising of dissent. All of these have profoundly shaken democracy and India's federal character.

Federal institutions like the Inter-State Council and the Finance Commission charged with equitable financial devolution principles have given way to the reshaping of taxation and resource distribution in favour of the Centre, and the overriding of state policies through centrally sponsored schemes. We see the naked use of Governors to control opposition-ruled States in ways that violate both the letter and spirit of the constitution. And the conflicts in sensitive border areas of Kashmir and Manipur have again been handled in ways that weaken state authority and exacerbate local community anxieties.

At a time when the Indian constitution is under grave assault, the Centre for Equity Studies planned with the publishers Speaking Tiger a series of short monographs that attempt to identify, unpack and explain the basic ideas of the Constitution.

We identified many of the key ideas for this series, from a reading of the text of the preamble of the Constitution. These were: Secularism, Socialism, Democracy, Justice, Liberty, Equality, and Fraternity.

However, we felt that there were at least two other essential ideas of the Constitution that needed to be added to our literal reading of the words in the preamble. One of these was Scientific Temper. The other was Federalism.

Shortly to be released is Federalism: Making and Unmaking of a Union of States. It sets out how the idea of federalism was imagined, debated, pledged and implemented after freedom and the grave dangers it faces in Modi’s India.

What the author Avinash Kumar accomplishes is to admirably capture crucial elements of the reverberant sweep of the thinking of the makers of independent India. How they sought to weave a democracy from this boundlessly diverse land with followers of every major religion in the world, more than 500 often restive princely states, and – according to a recent survey – 780 languages and 66 scripts.

The word federalism is never mentioned in the constitution. Yet when BR Ambedkar introduced the draft constitution, he described it as a “federal constitution”. He argued that India’s Constitution really is federal at its core.

Gandhi was firmly opposed to centralised states. His influential Hind Swaraj published in 1909 was not just a landmark critique of modernity and Western civilisation. It contained a blueprint for free India as a true federation of self-sufficient village republics founded on the principles of non-violence and truth. But Ambedkar passionately rejected Gandhi’s idealisation of the village republic. Villages, he said, were cesspools of caste inequity and oppression.

The federalism voted for by the constituent assembly was very distant from Gandhi’s swaraj. Ambedkar clarified that India was not a classic federation, like the United States. It was a “Union of States,” not a federation born of agreement among sovereign units. In this way, India became a federation but one that tilts to the centre, balancing unity with regional autonomy.

As the decades passed, the Gandhian moral beacon that “What touches all must be decided by all” has for the most part progressively faded in the imagination and practice of the federal ideal in India.

During the constituent assembly debates between 1946 and 1949, Ambedkar was joined by Nehru and Vallabhbhai Patel to prioritise national unity and integrity over regional autonomy. In the shadow of the horrific Partition bloodbath of religious violence and the sometimes reluctant integration of the princely states, they chose for India a federal structure but with a strong central bias. Nehru felt this was essential for stability and unity in the vast hinterland of illiteracy, communal forces, caste and ethnic divisions. He was convinced that a strong Centre also was essential to establish a secular, socialist welfare state.

Some in the constituent assembly like Sarangdhar Das and Frank Anthony advocated for maximum powers to be vested in the Centre to ensure national unity and stability in light of the challenges India faced post‑Partition. Brajeshwar Prasad feared that the creation of semi‑sovereign states could lead to dangerous centrifugal forces, that regional forces might tear the country apart.

Others like BM Gupte felt that the truly federal idea had been given short shrift. He argued: “The units are kept completely dependent on the Centre for finances. This so‑called independence is just a façade because the provinces rely entirely on the Centre’s good will for financial support.”

Linguistic and regional aspirations soon began to test India’s quasi-federal system. A powerful demand rose from the ground after independence to reorganise states boundaries on linguistic grounds. The Yiddish linguist Max Weinreich famously described a “language” as “a dialect with an army and a navy”. It was language that was to result in the bloody separation of Bangladesh from Pakistan. The language agitations in India were not on the backs of armies and navies, but spurred by passionate and sometimes militant activists.

The Congress committee known as the “JVP” committee – named after its members Jawaharlal Nehru, Sardar Vallabhbhai Patel, and Pattabhi Sitaramayya – both advised against linguistic reorganisation and the creation of new provinces because they felt that maintaining national unity was the priority of the time.

But linguistic aspirations refused to die down. In December 1952, Potti Sriramulu died after a hunger strike demanding a Telugu-speaking state. This sparked rioting and many died. Nehru eventually agreed to the creation of Andhra Pradesh and to establish an independent commission to address other statehood demands.

After the States Reorganisation Act of 1956, the Telangana region of Hyderabad State was merged with Andhra Pradesh, the Malabar district of Madras Presidency was joined with Travancore-Cochin to create the state of Kerala, Kannada-speaking regions from Bombay, Hyderabad, and Madras Presidency were added to Mysore State to form Karnataka, and the Bombay State was expanded by merging it with Kutch, Saurashtra, and Marathi-speaking parts of Hyderabad.

In 1960, Maharashtra and Gujarat were created from the former Bombay province, and in 1966, Haryana was separated from Punjab. Tripura and Mizoram were created on the basis of languages that were not even in the list of 22 languages scheduled in the Constitution. These were Kokborok and Mizo respectively.

Avinash Kumar describes how the imposition of Hindi as the national language was associated with fears of a centralised state encroaching on regional aspirations, from the times of Lal Bahadur Shastri to Narendra Modi. When in the 1960s, prime minister Lal Bahadur Shastri’s government dropped English as the second official language with Hindi, 27-year-old Chinnasamy from Tiruchi left a note stating “I plan to die in order to protect Tamil. One day, my goal will be met”, before setting himself on fire. Six more youths set themselves aflame or consumed poison and 70 lives were lost before Shastri withdrew his order.

The government promulgated a three-language formula, requiring all students to learn English, Hindi and any one modern Indian language, but Tamil Nadu under Annadurai refused to implement this. Fast-forward to 2025. Udhayanidhi Stalin of the Dravida Munnetra Kazhagam declares that “If Hindi is imposed on us, not hundreds, but thousands of youths are ready to sacrifice their lives to protect Tamil and our rights.”

While the legitimacy of linguistic states are accepted in principle, the Indian state has been consistent in resisting demands of religious states. Nehru firmly turned down the demand for a separate Punjabi Sooba for Sikhs. This demand was partially conceded in 1966 only after it was reframed to focus on linguistic rather than religious grounds.

Over the decades, regional aspirations not restricted to language – but not on the basis of religion – formed the ground for the creation of new states. Sikkim became a new state after it joined the Indian union in 1975. Goa became a state in 1987 as well as various states in the north-east responding to regional aspirations. Chhattisgarh, Jharkhand, Uttarakhand became states in 2000, and Telangana in 2014.

Avinash Kumar describes fiscal federalism as “both a tool of cooperation and a source of friction”. He identifies it as being the most contested arena in India’s federalism. The Constitution empowers the Union to collect major taxes such as income tax, corporate tax, and excise duties, while States can levy taxes on land, agricultural income, alcohol, and sales of goods, among others.

Ambedkar in the constituent assembly was a strong advocate of defending the states’ right to levy and collect sales tax, so that at least one major source of revenue lay with the states, securing for them some autonomy in financial decision-making. The Planning Commission was criticised by states at times for being top-down in determining the scale of central resources available to states and how they will deploy these.

From the late 1960s onwards, the Central government through the Planning Commission launched a growing number of important centrally-sponsored schemes for combating poverty, including programs for livelihoods, credit, food and housing. These on balance had positive results from the prism of equity, but also had the effect of expanding further the central control over dissemination of resources to the states.

The Finance Commission is appointed by the President, and helps determine how tax revenues are distributed between the Union and States. It is supposed to function as a transparent arbiter and a defender of State finances and the finances of local governance bodies. Its performance has however been uneven.

The greater control over resources by the centre faced less resistance as long as the Congress was in power in the centre and the majority of the states. As this changed, state governments of other political parties began to express their dissatisfaction with this tilt of India’s federal arrangements to the union government.

An important landmark in this resistance was when in its 1989 manifesto the National Front coalition called for greater decentralisation as articulated by non-Congress state chief ministers, each of considerable political stature – Ramakrishna Hegde, NT Ramarao, Jyoti Basu and MG Ramachandran.

This argued that the States “ought to enjoy genuine autonomy – political, legislative, economic, fiscal and administrative – without submitting themselves to the indignity of becoming supplicants before the Centre, with a begging bowl”. Kumar however points to the irony that although the 1990s and early 2000s was the era of coalition governments in the union that relied hugely on regional parties, in practice even this period did not see a significant reworking of centre-state fiscal relations.

He also describes the impact from the 1990s onwards on India’s fiscal federalism of economic liberalisation policies. The Centre was subjected to greater financial discipline reducing the share of states in the fiscal pool.

States like Andhra Pradesh, Gujarat, Maharashtra, Orissa, Karnataka, Tamil Nadu and West Bengal began to lobby and compete for alternative sources of revenue, mostly in the form of foreign direct investment or by directly supporting the setting up of businesses and industries by foreign companies. This new era of “competitive federalism” however led to greater inequality between states and enhanced migration of unskilled labour from poorer states to those that were able to mobilise private and international capital.

It was hoped that the 73rd and 74th constitutional amendments would empower local bodies, bringing to life at last Gandhi’s principle – “What touches all must be decided by all”.

However, what actually mostly happened was that the real power of decision-making mostly remained with district-level bureaucracies. These officials are both influenced and controlled by the state and central governments. Local bodies have no real power over them.

It was as late as in 1992 that amendments were brought into the constitution to belatedly and in very limited measure implement Gandhiji’s idea of swaraj or village-led self-rule. Until then the federal contestation was primarily between the centre and the states. Urban bodies and people’s direct assemblies did not even enter the picture.

For this reason, the 73rd and 74th Constitutional Amendments of 1992 were optimistically hailed as a significant milestone in India's democratic federalism. These amendments for the first time conferred a constitutional status to local self-governments – Panchayati Raj Institutions in rural areas and Urban Local Bodies in towns and cities. These were touted as promoting decentralisation, and bringing the administration closer to the people by ensuring direct people’s participation in governance.

India’s federal structure in this way evolved from a two-tier to a three-tier structure. A new Eleventh Schedule was added to the Constitution, listing 29 subjects that could be devolved to the rural bodies and 18 to the urban bodies. Seats were reserved not just for Scheduled Castes and Tribes but also, for the first time, for women. Many states like Rajasthan, Madhya Pradesh, and Karnataka did take some steps to empower the local bodies. States like Uttar Pradesh and Bihar showed greater reluctance to do this. Bihar, Madhya Pradesh, Himachal Pradesh raised women’s reservations to 50%.

However, despite the rhetoric and self-congratulation that accompanied the 73rd and 74th amendments, real decentralisation of funds, functions and functionaries to this third tier barely occurred in practice. When programs like the Mahatma Gandhi National Rural Employment Guarantee Act were implemented through rural local bodies, this did enrich them with funds but panchayats became as Kumar observed, “implementers of central schemes, not autonomous planning bodies”. Decentralisation remained administrative, not political, and with little fiscal independence.

Gandhiji in Hind Swaraj had imagined these very communities not just as the bulwark against centralized despotic regimes but also as self-dependent economic communities. The 73rd and 74th amendments while paying lip service to these ideals in practice have done very little to make them a reality.

Kumar also maps the uneven implementation of the federal idea in India in the decades after freedom, and identifies periods marked by its conspicuous erosion. This was visible most of all under prime minister Indira Gandhi; and now even more damagingly under Narendra Modi. Kumar describes the Emergency (1975-77), under Prime Minister Indira Gandhi, as representing one peak of centralization, with the suspension of civil liberties and the undermining of federal autonomy. The Modi era from 2014 reflects the second peak, a phase of the ideologically driven erosion of India’s federal idea.

MG Golwarkar is one of the foremost Hindutva leaders who Narendra Modi once identified to be his greatest influence. Golwarkar writes starkly, “We are one country, one society, and one nation, with a community of life-values and secular aspirations and interests; and hence it is natural that the affairs of the nation are governed through a single state of the unitary type. The present federal system generates and feeds separatist feelings. In a way, it negates the truth of a single nationhood and is, therefore, divisive in nature. It must be remedied and the Constitution amended and cleaned so as to establish Unitary form of government.”

Hindutva demands a homogenisation of religion, language and culture, the denial of rights even of citizenship to religious minorities, and unquestioning obedience to the supreme leader. All of this is manifestly incompatible with federal and secular democracy.

We therefore understand that the rapid centralisation under the Modi government is the outcome of the rise of aggressive Hindutva.Kumar also refers to the deployment of popular films to push the Hindutva narrative at the expense of the complex political histories of states. Films like The Kashmir Files, Article 370, The Bengal Files, and The Kerala Story hinge on false and incendiary narratives of Hindu victimhood and Muslim radicalisation.

This is perhaps the most compelling part of Avinsha Kumar’s monograph, when he explains Hindutva's opposition to federalism is ideological.

We understand that the multiple assaults on federal democracy under Narendra Modi are not simply the outcome of an autocratic ruler hungry to amplify and centralise his power. We recognise it for what it is: an ideological project constituting an assault on both the idea of India but also the constitutional imagination of a secular democracy.

Federalism in the Indian Constitution today stands in mortal danger.

Harsh Mander is a peace and justice worker and writer. He leads Karwan e Mohabbat, a people’s campaign for solidarity and justice for the survivors of lynching and hate violence. He is visiting faculty in the South Asia Institute of Heidelberg University. His latest book, Under Grey Smoggy Skies: Living Homeless on the Streets of Delhi Cities, is in the bookstores.

Source: Scroll
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