India’s federal structure is designed to balance power and responsibilities between the central and state governments. The government has implemented several policies and measures to strengthen this federal structure and promote cooperative federalism. Key initiatives include the formation of new states and the implementation of the Goods and Services Tax (GST). Here’s an analysis of these policies and their impact on center-state coordination and resource-sharing:

Formation of New States
Overview

The formation of new states in India aims to improve administrative efficiency, governance, and regional development by addressing the unique needs and aspirations of different regions.
Notable instances include the creation of Telangana from Andhra Pradesh in 2014 and the earlier formation of Uttarakhand, Jharkhand, and Chhattisgarh in 2000.
Impact on Federal Structure

Administrative Efficiency: New states often result in more localized and efficient administration, allowing for tailored development policies that address specific regional challenges.
Political Representation: The formation of new states provides better political representation and empowerment for previously marginalized regions.
Economic Development: New states can focus on leveraging local resources and addressing specific economic needs, promoting balanced regional development.
Challenges

Resource Allocation: The division of resources, assets, and liabilities between the parent state and the new state can be contentious and complex.
Inter-state Disputes: Issues like water sharing and boundary disputes can arise between states, requiring careful negotiation and coordination.
Implementation of Goods and Services Tax (GST)
Overview

Introduced in 2017, GST is a comprehensive indirect tax that subsumes multiple central and state taxes into a single unified tax system, aiming to create a single national market.
Impact on Federal Structure

Unified Tax System: GST has created a uniform tax structure across the country, reducing tax-related barriers to inter-state trade and fostering economic integration.
Revenue Sharing: The GST Council, comprising representatives from both the center and states, decides on tax rates, exemptions, and revenue-sharing, promoting cooperative federalism.
Increased Revenue: GST has widened the tax base and increased revenue collection, providing states with more resources for development.
Challenges

Implementation Issues: Initial implementation faced challenges like technical glitches, compliance burdens, and the need for frequent revisions in tax rates.
Revenue Shortfall: Some states have reported revenue shortfalls, leading to demands for higher compensation from the central government.
Federal Tensions: Disagreements within the GST Council on tax rates and revenue sharing have sometimes strained center-state relations.
Other Key Policies and Measures
Finance Commissions

Overview: Periodically constituted Finance Commissions recommend the distribution of tax revenues between the center and states and among the states themselves.
Impact: These commissions ensure a fair distribution of resources, taking into account factors like population, income, and developmental needs, thereby promoting fiscal federalism.
NITI Aayog

Overview: Replaced the Planning Commission in 2015, aiming to foster cooperative federalism through a structured support initiative and mechanisms with states.
Impact: NITI Aayog involves states in the planning process, encourages competitive federalism through performance-based grants, and facilitates policy coordination between the center and states.
Centrally Sponsored Schemes (CSS)

Overview: These schemes involve joint funding by the center and states for implementing developmental programs.
Impact: CSS ensures that both levels of government contribute to critical sectors like health, education, and infrastructure, promoting collaborative development efforts.
Evaluation of Impact
Improving Center-State Coordination

Institutional Mechanisms: Bodies like the GST Council and NITI Aayog provide platforms for continuous dialogue and decision-making between the center and states.
Joint Policy Formulation: These mechanisms facilitate joint policy formulation and implementation, ensuring that state-specific concerns are addressed within national policies.
Enhancing Resource-Sharing

Equitable Distribution: Finance Commissions and the GST framework ensure a more equitable distribution of financial resources, enabling states to undertake development activities.
Capacity Building: Central support for state-level initiatives through schemes and programs enhances states’ capacity to manage resources and deliver public services effectively.
Challenges and Areas for Improvement

Strengthening Institutional Frameworks: There is a need to further strengthen institutional frameworks for resolving inter-state disputes and ensuring effective implementation of policies.
Addressing Revenue Imbalances: Mechanisms to address revenue imbalances and provide timely compensation to states experiencing revenue shortfalls under GST need to be refined.
Fostering Genuine Autonomy: Ensuring genuine autonomy and flexibility for states in implementing centrally sponsored schemes can enhance the effectiveness of federal arrangements.
Conclusion
The government’s policies and initiatives, such as the formation of new states and the implementation of GST, have significantly strengthened India’s federal structure and promoted cooperative federalism. These measures have improved center-state coordination and resource-sharing, fostering more balanced and inclusive development. However, continuous efforts to address implementation challenges, ensure equitable resource distribution, and enhance institutional frameworks are essential to sustain and further enhance the effectiveness of these federal initiatives.