Challenges to Federalism in India: A Study of Fiscal Autonomy and Regional Disparities

Abstract

Balancing fiscal autonomy and addressing regional imbalances are key difficulties for Indian federalism, which is characterised by a unique blend of cooperative and competitive arrangements. India's changing federal dynamics, with a focus on the effects of fiscal centralisation on state autonomy. It delves into the ways in which regional disparities are worsened by variables like uneven allocation of resources, over-reliance on federal funding, and tax power asymmetries, all of which impact the fiscal autonomy of states. The article emphasises the conflict between federal control and state-level fiscal autonomy by examining case studies and current policy shifts, such as the Goods and Services Tax (GST) implementation. in order to improve federal ties and encourage inclusive development in all areas, a system of more fair distribution of resources is required. To overcome these obstacles and attain a state-of-the-art balance in India's federal structure, we provide policy reform recommendations.