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Changing Contours of Union–State Relations

In: Studies in International Economics and Finance

Author

Listed:
  • M. Govinda Rao

    (Takshashila Institution
    NIPFP)

Abstract
The Union–State relationships in India have evolved over time in the framework of severely unbalanced power distribution. An important fallout of the skewed distribution of power structure is the weak bargaining power of the states. This is reflected in the restrictions placed on the Finance Commissions through the terms of reference and proliferation of a parallel channel of transfers for central schemes. The contradictions in Centre–State relationships have come to the fore during the COVID-19 pandemic. The States, being closer to the people, have had to fight the pandemic with drained resources. In this environment, putting conditions on the States to enable additional borrowing, abrogation of the agreement to pay compensation for the loss of revenue from GST has adversely impacted on the confidence and trust between the Centre and States and does not bode well for the future of the Centre–State cooperation in policy matters. All these point to the urgent need to have an institutional mechanism for intergovernmental bargaining and conflict resolution.

Suggested Citation

  • M. Govinda Rao, 2022. "Changing Contours of Union–State Relations," India Studies in Business and Economics, in: Naoyuki Yoshino & Rajendra N. Paramanik & Anoop S. Kumar (ed.), Studies in International Economics and Finance, pages 203-216, Springer.
    • Handle: RePEc:spr:isbchp:978-981-16-7062-6_11
    DOI: 10.1007/978-981-16-7062-6_11
    as

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