Constitutional Framework for Division of Powers
The Indian Constitution establishes a federal structure with a clear division of legislative, executive, and financial powers between the Union and the States. This division is designed to balance the need for a strong central government with the autonomy of the states, catering to India’s diverse and complex socio-political landscape.

Legislative Powers
Three Lists in the Seventh Schedule:

Union List: Contains subjects of national importance such as defense, foreign affairs, atomic energy, railways, and banking. Only the Parliament has the exclusive power to legislate on these matters.
State List: Contains subjects of regional and local importance such as police, public health, agriculture, and irrigation. State legislatures have the exclusive power to legislate on these matters.
Concurrent List: Contains subjects of common interest to both the Union and States such as education, marriage and divorce, bankruptcy and insolvency, and environmental protection. Both the Parliament and State legislatures can legislate on these subjects, but in case of a conflict, the Union law prevails.
Residuary Powers:

Union Government: The Constitution vests residuary powers (those not listed in any of the three lists) in the Parliament, allowing it to legislate on matters not enumerated in the State or Concurrent Lists.
Executive Powers
Union Executive:

President: The executive authority of the Union is vested in the President, who acts on the advice of the Council of Ministers headed by the Prime Minister.
Union Government: Responsible for subjects in the Union List, with a hierarchical administration structure to implement policies.
State Executive:

Governor: The executive authority of the state is vested in the Governor, who acts on the advice of the Council of Ministers headed by the Chief Minister.
State Government: Responsible for subjects in the State List, with its administrative machinery to implement policies.
Financial Powers
Division of Taxes:

Union Taxes: The Union government levies and collects taxes such as income tax, customs duties, and excise duties.
State Taxes: States levy and collect taxes such as sales tax (now subsumed under GST), state excise, land revenue, and stamp duties.
Goods and Services Tax (GST):

Concurrent Taxation: Introduced in 2017, GST is a unified tax on goods and services, replacing various state and central taxes. It is administered concurrently by the Union and State governments.
Finance Commission:

Revenue Sharing: Article 280 provides for a Finance Commission to recommend the distribution of revenues between the Union and the States, ensuring fiscal federalism.
Evolving Dynamics of Center-State Relations and Cooperative Federalism
Phases of Centralization and Decentralization:

Post-Independence Era: The initial years saw a strong central government under leaders like Jawaharlal Nehru, focusing on national integration and development.
1970s and 1980s: Periods of political centralization, particularly during Indira Gandhi’s tenure, with the use of Article 356 to impose the President’s Rule in states perceived to be in crisis.
Emergence of Regional Parties:

Coalition Politics: The rise of regional parties in the 1990s led to coalition governments at the center, necessitating greater accommodation of state interests and decentralization of power.
Economic Liberalization:

Reforms of 1991: Economic liberalization policies led to a shift in center-state relations, with states seeking greater economic autonomy and competition for investment.
Cooperative Federalism:

NITI Aayog: Replacing the Planning Commission in 2015, NITI Aayog aims to foster cooperative federalism by involving state governments in the policy-making process.
GST Council: The GST Council is a federal body that includes representatives from both the Union and State governments to make decisions on GST rates, policies, and reforms, embodying cooperative federalism.
Finance Commissions: Regular Finance Commissions have played a crucial role in ensuring a fair distribution of financial resources between the Union and the States, promoting fiscal federalism.
Recent Trends:

Central Schemes and State Autonomy: There have been tensions over centrally sponsored schemes and the conditionalities attached to them, affecting state autonomy.
COVID-19 Pandemic: The pandemic highlighted the need for robust center-state cooperation in managing public health crises, showcasing both collaborative and conflicting aspects of federal relations.
Key Challenges in Cooperative Federalism
Fiscal Imbalance:

Vertical Imbalance: The Union government collects the majority of the taxes but the expenditure responsibilities are shared with the states, leading to a dependency of states on central transfers.
Horizontal Imbalance: Differences in revenue-generating capacities among states lead to disparities, necessitating financial redistribution through mechanisms like the Finance Commission.
Political Dynamics:

Party Politics: Political differences between the ruling party at the center and in the states can hinder cooperative federalism.
Use of Article 356: The misuse of Article 356 to impose President’s Rule has been a point of contention, though its use has declined in recent years.
Implementation of Central Policies:

Central Schemes: States often have concerns about the design and implementation of centrally sponsored schemes, leading to calls for greater flexibility and local adaptation.
Administrative Capacity:

Variations in Capacity: Differences in administrative capacities among states can affect the implementation of policies and programs, impacting the overall efficacy of cooperative federalism.
Conclusion