Context: The tendency to centralise power by the Union government is increasing. It will alter the basic structure of Federalism in India.
Background

• Recently, a NITI Aayog Member, asserted that it was the lack of centralisation that has led to poor management of the ongoing COVID-19 vaccination drive.
• The claim reinforces the practice of the growing centralisation of power practiced by the current union government.
• In this article we will discuss the challenges posed due to Centralisation of Power in the Economic, Political and Social sphere.

How the central government is affecting Political federalism?

• There is a growing incursion of the Union government into sectors where State governments have a primary responsibility. For instance,

One, there has been increasing centralisation in resource allocations and welfare interventions. For instance, GST.

• This has negatively impacted the finances of State governments, especially after the implementation of Goods and Services Tax (GST).

Two, the Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health.

• For example, NEET exam, meddling with the appointments of vice-chancellors in universities funded and run by State governments etc.,
• It subverts the affirmative action policies developed at the regional level in response to local political demands.

Three, the Centre is increasingly ignoring elected representatives of State governments. It is holding direct meetings with State secretaries and district collectors on issues that are primarily under State control.

• It subverts the Constitutional arrangement of Power-sharing between Centre and State.

How the central government is encroaching into Economic federalism?

• Nepotism and crony capitalism: It is evidently visible that big businessmen are getting benefits from the government.
• Apathy towards small businesses: The centre had strongly supported the Indian big business from global competition by sidelining the Regional Comprehensive Economic Partnership (RCEP). In contrast, the government has eroded the power of small businesses through GST and the call for a single national market.
• Restricting the political funding for regional parties: Regional parties rely on region-specific rent-thick sectors for political funding, such as mining and real estate. The ruling party has curtailed this by leveling corruption allegations and the use of central agencies against businesses supporting the regional parties. This weakens the ability of regional parties to compete with the ruling party electorally.

How the central government is encroaching into the social fabric of states?

• Besides the legal-constitutional aspects of federalism, it is diversity in the cultural foundation of regions that sustains Indian federalism.
• However, the center is trying to homogenize Indian culture. Markers of regional identities and regional socio-cultural practices are now interpreted as a pan-Indian Hindu tradition.
• For instance, Tamil, which has been a symbol of an anti-Vedic tradition, is now seen as a segment of that Hindu past. While Tamil Muslims and Christians becoming outsiders.
• A federal coalition that looks beyond the legal-constitutional aspects of federalism is needed to preserve the idea of a plural India.