Q. What changes has the Union Government recently introduced in the domain of Centre-State relations? Suggest measures to be adopted to build the trust between the Centre and the States and for strengthening federalism.

Model Answer:

Centre-State Relations

Centre-State relations are a crucial aspect of India’s federal structure, ensuring balanced governance and development across the nation. The Union Government has recently introduced several changes in this domain:

• Implementation of Goods and Services Tax (GST): This major fiscal reform has altered the tax collection and distribution mechanism between the Centre and States, impacting financial autonomy.

• Amendments to All India Services rules: Changes in deputation and transfer policies have given the Centre more control over IAS, IPS, and IFoS officers, affecting state administrative autonomy.

• Restructuring of Centrally Sponsored Schemes: The rationalization of these schemes has led to changes in funding patterns and implementation processes, influencing state-level development initiatives.

• NITI Aayog’s evolving role: As a replacement for the Planning Commission, NITI Aayog’s functioning has redefined Centre-State planning and policy coordination mechanisms.

To build trust and strengthen federalism, the following measures can be adopted:

1. Revitalize the Inter-State Council:
• Hold regular meetings to discuss and resolve Centre-State issues
• Ensure follow-up actions on decisions taken during these meetings

2. Enhance fiscal federalism:
• Review and refine GST implementation based on state feedback
• Ensure timely release of states’ share in central taxes and grants

3. Strengthen cooperative federalism:
• Involve states more actively in formulating national policies
• Respect state autonomy in subjects under the State List

4. Reform the role of Governors:
• Establish clear guidelines for Governor appointments and functions
• Ensure impartiality in their role as a link between Centre and States

5. Empower local self-governance:
• Strengthen Panchayati Raj Institutions and urban local bodies
• Ensure devolution of funds, functions, and functionaries

Conclusion: Balancing Centre-State relations is vital for India’s governance. Trust-building and strengthening federalism require continuous dialogue, cooperation, and mutual respect between both levels of government.