WE ARE OFTEN TOLD THAT one of the great virtues of Indian democracy is its federal character. From the outset, India’s founding fathers eloquently argued that it was only through federalism that the nation-state of India could survive after independence. Decentralised power provides space for regional or linguistic identities to assert themselves. States—the constituent units of a diverse Indian union—are free, albeit with some notable constraints imposed by the Centre, to shape their economic agendas. Federalism allows states to exercise autonomy over critical areas of day-to-day governance. As defined by the Constitution, authority over many crucial sectors—from public health to land to law and order—lies with the states. In numerous other areas—education comes to mind—the states and the Centre share concurrent responsibility.
Yet federalism is heralded not simply for what its constituent parts are free to do on their own, but also because of how they are able to interact with one another. In the memorable words of the American Supreme Court justice Louis Brandeis, “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory.” The very existence of a federal union—in India or elsewhere—is thought to provide a venue for states to experiment, compete, and even learn from one another. Federalism, in theory anyway, creates a marketplace for public policy, in which the best policies eventually take hold and are replicated across units, while the worst are relegated to the dustbin of history.
As India’s economic prospects have dimmed and the Centre has been dogged by corruption scandals and policy missteps over the last 12 months, many inside (and outside) India have turned their attention from the Centre to the states—in hopes that a competitive spirit amongst the states will be India’s pathway to better economic and social outcomes, not to mention more robust democracy.