The North-South Divide: The Transforming Landscape Of Federalism In India

Dr D. Radhika Yadav, Principal, the University College of Law, Osmania University

Pavan Kasturi, Junior Research Fellow, LL.M (National Law School Bengaluru, 2022- 23); BA. LL.B (University College of Law, Osmania University, 2017-2022)].

ABSTRACT:

This paper explores the interplay between fiscal federalism and the impending delimitation crisis, focusing on their impact on the southern states of India. It begins by acknowledging the significance of federalism as a unifying force that promotes equitable distribution of resources, accommodates diverse needs, empowers local governance, and fosters inter-governmental cooperation. However, recent trends indicate a worrisome centralization of power, resulting in concerns among opposition-governed states, particularly in South India.

The first major issue discussed is the allocation of revenues, which tends to favor states with larger populations, creating a standoff between states that have effectively managed population growth and those that have not. Despite commendable performance and contributions to the national treasury, states with smaller populations argue that they receive a disproportionately smaller share of tax revenues. This fiscal imbalance is examined in light of the Fifteenth Finance Commission report. The second issue addressed is the impending delimitation crisis, specifically affecting South Indian states. Delimitation, which is slated to occur in 2026, could significantly curtail the parliamentary representation of these states, thereby diminishing their political influence. This phenomenon, referred to as political asymmetry, arises from the geographical and demographic proportions of the units.

The paper extensively examines these concerns and their significant impact on the southern states. It highlights the paradoxical nature of political asymmetry, which hinders effective resolution of revenue-sharing issues and exacerbates the fiscal burden. The impending loss of political power further compounds the challenges faced by these states. The second part of the paper explores potential solutions to overcome these challenges, aiming to promote fiscal equity and address the implications of delimitation on political representation. By proposing alternative approaches to resource allocation and measures for fair representation, this paper contributes to the ongoing discourse on strengthening federalism in India and fostering a resilient and enduring Union.