By Eric Vandenbroeck and co-workers

How Centralization Is Undermining Federalism and National Unity in India

The BJP’s impatience with the federal principle has left India without a credible mediator at this crucial juncture. With the fissures that have already taken root, there are few incentives for states or for the central government to advance a meaningful set of reforms. Instead, a fractious federal politics is likely to define India through the next decade—and likely to undermine India’s economic aspirations. Perhaps even more significant, however, it may weaken the very glue that first bound the country together and made its democracy such a unique experiment—one that showed the world how plural identities could be held together within the ambit of a nation-state.

While attending a wedding in March, M. K. Stalin, the chief minister of India’s fastest-growing state, Tamil Nadu, made a peculiar request: “Earlier we used to say, take your time and have a baby. However, the situation has now changed. I urge newlyweds to immediately have babies.” In the world’s most populous country, such a remark might seem absurd; for much of independent India’s history, the policy imperative, after all, has been population control rather than population growth. But Stalin’s statement had little to do with population policy. It had to do with political power.

India’s constitution mandates that parliamentary seats be reapportioned after every census, which normally happens every ten years. But this process, called “delimitation,” has not taken place since 1973, meaning the allocation of India’s parliamentary seats today is based on numbers gathered in the 1971 census. In 1976, a constitutional amendment suspended the delimitation process, forbidding any revision in the number of parliamentary seats until after the 2001 census. In 2002, Parliament extended this suspension of delimitation again, postponing it until after 2026. Both in 1976 and 2002, the freeze originated from fear that disparities in India’s demographics—with populations in richer, southern states on track to stabilize much faster than poorer and more populous northern states—would alter the balance of power in the country. The stated intent was to avoid penalizing states for their economic progress and lower birth rates. Given more time, the thinking went, the rest of the country would catch up to the development progress of the South.

But rather than closing, the gap between the economic and the population growth rates of northern and southern states has widened dramatically. The northern state of Uttar Pradesh, for example, had a population just over double that of Tamil Nadu in 1971; today, it is estimated to be three times as large. The fertility rate in Tamil Nadu is now below the targeted replacement rate of roughly 2.1 births per woman, while that in Uttar Pradesh, though declining, remains much above it. This divergence could have significant consequences for political representation. A widely cited 2019 study by scholars Milan Vaishnav and Jamie Hintson predicted that if delimitation happens after 2026, as it’s currently set to be, Bihar and Uttar Pradesh, two north Indian states, would together gain as many as 21 seats, while Tamil Nadu and Kerala, two southern states, could lose a combined 16 seats. Without delimitation, Uttar Pradesh would be left with at least 11 fewer seats than its population would in theory command.

After the census scheduled for 2021 was inexplicably postponed, in June 2025 the central government announced that a fresh census would be conducted in March 2027, making it possible for India to reapportion parliamentary seats ahead of the next general election, scheduled for 2029. The stakes of such a change for India’s political parties are high. The country’s most dominant party, the Bharatiya Janata Party, has a strong core of support in the more populous north but has struggled to gain a foothold in southern states, especially in Tamil Nadu, where regional parties dominate. If these southern states lost seats, the BJP would have an easier time winning or cobbling together majorities in Parliament. Thus, in calling for Tamilians to have more babies, Stalin, who leads the Dravida Munnetra Kazhagam and is an important figure within the national alliance of opposition parties known as INDIA, was drawing political battle lines.

The tensions surrounding delimitation extend far beyond the electoral realm—they reflect a broader erosion of Indian federalism. The widening socioeconomic gaps among states and the BJP’s ideological project are putting new pressures on the federal bargain on which India’s democracy is based. Without an appropriate resolution to these challenges, a more fractious federal politics will take hold in India, hindering economic progress and, more significantly, curtailing hard-won democratic freedoms.

 

Federalist Founding

India is a continent of country home to a vast and diverse population with many languages—the government recognizes 22 officially—religions, and ethnicities. During India’s independence movement and post-independence nation-building, preserving this diversity within the confines of a single nation-state was a difficult but essential political project.

After winning independence in 1947, India’s founders designed a federal system that enshrined a unique model of nationalism. The country became what scholars Alfred Stepan, Juan Linz, and Yogendra Yadav call a “state-nation,” where the state grants its disparate regions degrees of autonomy to protect their socio-cultural identities and hold them together through a sense of national belonging from the top down. Power in this system is still skewed toward New Delhi, because a strong central government was considered essential to achieving national social and economic goals. The central government had the power to redraw state boundaries, for example, precisely so that it could accommodate this cultural and ethnic diversity. At critical junctures in independent India’s history, the union government has deployed these powers to strengthen the project of nation-building. In the 1950s, for example, the central government redrew the country’s colonial boundaries along linguistic lines in response to language-based political mobilization that sometimes turned violent. In this way, India could give subnational, identity-based political groups more representation within the boundaries of the nation-state. The Indian constitution also allowed for asymmetric federal arrangements that granted greater degrees of autonomy to certain regions, including the Muslim-majority state of Jammu and Kashmir and parts of the hilly and ethnically diverse northeast of India. This “state-nation” form of federalism became the glue that held the continental country—and its democracy—together.

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Fiscal and administrative structures also skewed toward the center, so that the Indian government and the states could cooperate and hold each other accountable through a common federal system. Equity in public services was the binding principle guiding this power-sharing. The center, for example, has the power to collect taxes, but it follows a formula, determined by a constitutionally mandated finance commission, to redistribute the revenue to states.

B. R. Ambedkar, the architect of the Indian constitution, described the document as both “unitary and federal, according to the requirements of time and circumstances.” But in practice, India developed a political culture that was only narrowly and instrumentally committed to the federal principle. Over the years, the center routinely misused its constitutional powers over states. This was most visible when the ruling Congress Party became functionally authoritarian during a period of “emergency rule” from 1975 to 1977, under Prime Minister Indira Gandhi. It drew on these powers to weaken state governments and impose its national agenda through fiscal centralization.

In the 1990s, as the Congress Party weakened, regional, identity-based parties began to play a significant role in national politics. They joined coalition governments with national parties and other regional parties, breaking the unitary impulses that Congress’s dominance had fed.

This recalibration, however, did not mean that India’s political culture became one of collective bargaining for states’ rights. India’s centralized federal design—consisting of dispute resolution institutions, the appointment of governors by the central government, and fiscal institutions—needed real reform. But chief ministers of India’s diverse regions were not eager to give up their newfound power to make India’s federal politics more equitable. Instead, they became adept at drawing on their national relevance to extract bargains and rents from the center while accumulating political credit within the centralized system. Political opportunism prevailed over the country’s principled federal foundations.

Celebrating election results outside the Bharatiya Janata Party state headquarters, New Delhi, February 2025

 

Breaking the Bargain

When the BJP acquired near-total dominance over national politics after its election landslide in 2014, Indian federalism entered a new era. Over the past decade, well-established federal compromises have been unsettled, and new fissures have emerged.

The BJP, a Hindu nationalist party, is ideologically impatient with the principles of federalist accommodation, privileging instead, to borrow the Hindutva slogan of “Hindi, Hindu, Hindustan,” a singular national identity defined by the Hindu religion and the north Indian language of Hindi. The BJP has been careful not to directly challenge the linguistic basis of India’s federalism, but it has flirted with doing so, with party leaders making frequent political remarks about Hindi hegemony that have spurred regional parties to double down on their linguistic identity-based politics in opposition to the BJP. Tensions caused by subnational identity-based politics, which the carefully crafted federal settlement had for a time kept at bay, are slowly regaining political salience. This is especially perceptible in states where linguistic and cultural identities have long been a point of pride, such as Tamil Nadu.

An even more dramatic shift to the country’s federal bargain came in 2019, when the BJP-led central government abrogated Article 370 of the Indian constitution, the provision that had granted the majority-Muslim state of Jammu and Kashmir a special status and autonomy. The mechanisms by which this was done crossed several red lines in India’s federal design. The central government not only stripped Jammu and Kashmir of its autonomy but also eliminated its statehood, bringing it under direct rule by downgrading it from a state to a union territory. Although local elections were held in 2024, statehood is yet to be restored. The central government took a similar step against Delhi, the state home to the capital, New Delhi, (comparable perhaps to the District of Columbia, were it a state). The Modi government passed a law in 2023 that seized key administrative functions from Delhi, such as bureaucrat transfers and postings, effectively stripping the government of its executive powers. In both instances, the center circumscribed the powers of state governments and thereby effectively disenfranchised the voters who had elected them. Indian central governments have long misused their powers to impose their will on the states. But few Indian governments have acted so brazenly in violating the spirit of the country’s federal bargain.

This overstepping has also challenged the principle of India’s “state-nationhood.” Asymmetric federal arrangements are a critical vehicle for protecting the compromises regarding regional autonomy on which independent India was founded. But this constitutional principle is now unsettled. In the process, the BJP has lost its political credibility to mediate, through accommodation and representation, the assertions of ethnic and regional identity politics. Indeed, its impatience with principles of accommodation has opened new fissures. This is already evident in the northeastern state of Manipur, which has been gripped by ethnic violence since the summer of 2023. Any political settlement of the strife in Manipur, primarily between two tribal communities, will require addressing each of their political anxieties—a feat that India’s current political culture has neither the credibility nor the political dexterity to achieve.

 

Push and Pull

In the economic realm, India’s federal system was designed to serve states’ unique developmental needs, regardless of their revenue-generating capability. Ensuring that all citizens have access to equivalent public services is its guiding principle. Effectively, this has meant that richer states have shared a significant portion of their tax revenues with poorer states. But as the socioeconomic gap has grown, richer states have begun to challenge this long-accepted principle, which they now argue “penalizes” them for their economic success while rewarding poor performers. In 2024, the chief minister of the southern state Karnataka, for example, told the 16th Finance Commission—the body charged with determining the formulas for tax devolution for the next five years—that by the current equity-based formulas, for every rupee that Karnataka contributes, it receives only 0.15 of a rupee back. Uttar Pradesh, by contrast, gets 2.73 rupees back for every rupee it contributes.

The upcoming delimitation, in which southern states stand to lose seats, has only heightened the stakes for these disputes. But finding a solution is not easy. A fundamental move away from the redistributive principle will make it significantly more difficult to address the growing regional economic inequalities that have spurred discontent with Indian federalism in the first place. After all, poorer regions need greater resources to bridge the socioeconomic gap. But the ever-widening disparities are making this politically and practically untenable.

Even as richer states seek greater fiscal autonomy, the imperatives of economic growth pull in another direction. A growing modern economy requires integration. Goods, services, and people must be able to move smoothly over its internal borders. There is a sound economic rationale, therefore, in adopting rationalized tax structures between regions, centrally regulated national markets, and uniform public services across state boundaries. A more centralized economy would have many benefits. But it also requires states to give up degrees of fiscal autonomy. In 2017, India’s center and states forged a grand bargain, passing a Goods and Services Tax that required states to give up their power to set certain indirect tax rates in favor of a coordinated, uniform tax system. But in losing autonomy in one area—taxes on goods and services—the states felt more acutely the importance of direct taxes, such as those on income, that are redistributed by the central government. This is one reason why richer states are bristling at the current system. These tensions could be managed and resolved by the careful intervention of the center. But just as in the political domain, the BJP has used its powers to deepen centralization in the fiscal realm, undermining its credibility as a mediator in the process.

 

A Fractious Future

India’s current power-sharing model is in crisis, with traditional federalism struggling to fulfill the imperatives for economic growth and to resolve demographic inequalities in politically meaningful ways. These fissures won’t lead to anything as drastic as secessionism. Indian federalism’s great success is the fact that the state-nation model is deeply entrenched, its polarizing identity politics notwithstanding. Those challenging the federal bargain will still seek accommodation within the federal framework. But as regional economic and political divisions sharpen, national governance and dispute resolution will become much harder. So, too, will consensus and cooperation among states and between the states and the center become more difficult. The imperatives of partisan politics will overpower principled attempts to resolve tensions within the federal model. A standoff is considerably more likely than a resolution.

A number of possible solutions to the political and economic dilemmas confronting Indian federalism have circulated in the public sphere. India could, for example, reform its parliament. The Rajya Sabha, or upper house, was originally designed to serve as a “council of states,” but it has been severely diluted to no more than a parking lot for powerful politicians seeking a legislative role without having to win elections. If the Rajya Sabha were to become a genuine forum for representing states’ interests, it would offer more opportunities for finding renewed political consensus. India could also leverage already existing, underutilized platforms for interstate debate and dispute resolution. In the early 1990s, the country established an interstate council to mediate fiscal and administrative relations among states and between states and the center. But no government has taken the council or its potential seriously, pushing it to the margins—bureaucrats view a posting to the council as punishment for a misstep or for falling out of favor.

Above all, renewing India’s federal compact is a matter of political commitment. The BJP’s impatience with the federal principle has left the country without a credible mediator at this crucial juncture. With the fissures that have already taken root, there are few incentives for states or for the central government to advance a meaningful set of reforms. Instead, a fractious federal politics is likely to define India through the next decade—and likely to undermine India’s economic aspirations. Perhaps even more significant, however, it may weaken the very glue that first bound the country together and made its democracy such a unique experiment—one that showed the world how plural identities could be held together within the ambit of a nation-state.

 

 

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