Federalism and Fiscal Autonomy: Centre-State Relations in the Indian Constitution

Abstract

Federalism is a cornerstone of India’s constitutional structure, with power distributed between the Centre and the States. However, Indian federalism reflects a strong unitary bias, especially in fiscal matters. This paper explores the conceptual framework of federalism and fiscal autonomy in India, examines constitutional provisions governing the distribution of financial powers, and evaluates the role of institutions like the Finance Commission and GST Council. It further analyses key judicial decisions and political developments that have shaped Centre-State fiscal relations. By reviewing contemporary challenges, including issues arising from the Goods and Services Tax (GST) and COVID-19 pandemic, the paper highlights the need for cooperative federalism and greater fiscal decentralization to strengthen India's democratic framework.