India’s extraordinary journey as the world’s most vibrant democracy has been anchored in two foundational principles enshrined in our Constitution: democracy and federalism. Democracy has given citizens the power to express, participate, and hold institutions accountable. Federalism, on the other hand, has enabled governance to be responsive to India’s immense diversity, linguistic, cultural, social, and economic, spanning 28 states and 8 union territories.
The framers of our Constitution, with remarkable foresight, designed a model that was neither rigidly federal nor entirely unitary. Instead, they created a “Union of States” where powers are shared but unity is preserved. This model has enabled India to manage vast diversity while ensuring political stability, economic progress and national integrity.
As India looks towards Viksit Bharat @2047, the centenary of independence, the Union Government has rightly emphasized that this journey must be collaborative, inclusive, and future-oriented. The vision of a developed India, articulated by the Hon’ble Prime Minister and detailed through consultations led by NITI Aayog, calls for a renewed compact between the Centre and the States. The Union Government has consistently emphasized that true national development cannot be achieved without the transformation and empowerment of every state, every district and every citizen.
The Government of India has delineated an ambitious vision for Viksit Bharat @2047, a developed nation characterized by economic prosperity, social inclusivity, environmental sustainability, and global eminence. The objectives are multifaceted and aspirational, drawing from extensive consultations involving NITI Aayog, state governments and civil society. Key targets include:
These goals align with the Sustainable Development Goals (SDGs) and aim to position India as a Vishwa Guru (global leader) by 2047. Although national policy directives are pivotal, their execution is predominantly devolved to the states. States account for more than 60% of public expenditure and are entrusted with the delivery of essential services, including education, health, infrastructure, skill development, agriculture, and urban administration. In essence, India’s ascent to developed status is inextricably linked to the transformation of each state into a robust engine of growth. The nation’s development is coterminous with that of its constituent states, as evidenced by varying growth trajectories: high-performing states contribute disproportionately to national GDP, while laggards require accelerated support.
The vision of a developed India, articulated by the Hon’ble PM and detailed through consultations led by NITI Aayog, calls for a renewed compact between the Centre and the States.
India’s federal framework is delineated by its quasi-federal Constitution, which establishes a Union of States with a predominant Centre to ensure national integrity amid diversity. The framers, influenced by models like Canada and Australia, opted for a flexible federalism that allows for centralized interventions in emergencies. Over successive decades, the praxis of federalism has undergone evolution through structural reforms and political transformations:
The replacement of the Planning Commission with NITI Aayog in 2015 was expressly intended to advance cooperative federalism, shifting from a top-down to a collaborative approach. Recent developments, such as the 2024-25 Union Budget’s emphasis on state-specific incentives and the push for ‘One Nation, One Election’ in 2025, further illustrate this evolution. These institutional evolutions signify the maturation of India’s federal democracy. Nevertheless, as emergent challenges ranging from climate adaptation to digital governance proliferate, the apparatuses for federal coordination and confidence-building must correspondingly adapt.
Schemes like PMJAY and PMAY have delivered significant national-level outcomes, but future improvements can include providing states greater room. This refinement will help align national objectives with regional priorities
Notwithstanding advancements, India’s federal system confronts enduring structural and operational impediments. These necessitate systematic redress to catalyse the subsequent phase of national metamorphosis, particularly in light of contemporary dynamics like coalition politics post-2024 elections.
India’s federal architecture entrusts states with the bulk of social sector responsibilities, while the Union Government retains key taxation instruments like income tax, corporate tax and customs duties. Recognising this structural design, the Centre has consistently sought to strengthen state finances through higher tax devolution, Finance Commission transfers and predictable support via centrally sponsored schemes (CSS). Even under GST, which represents a historic milestone of cooperative federalism, the Union has repeatedly demonstrated its commitment by ensuring compensation mechanisms, stepping in during periods of stress (such as post-pandemic shortfalls) and working with states to improve buoyancy. The 2024-25 Economic Survey underscores that while states’ share in overall expenditure remains high, Union-state coordination in fiscal planning is essential to reduce borrowing pressures and sustain development momentum.
Significant differences in per capita income and social outcomes continue across states, reflecting India’s diversity and developmental journey. For example, Bihar’s per capita NSDP for 2023-24 is estimated at `70,000, compared to Maharashtra’s `354,000 and Goa’s `674,000. Yet, the Union has actively supported bridging these gaps through special category allocations, aspirational district programmes and targeted infrastructure initiatives that prioritise lagging regions. The role of Finance Commission grants, GST sharing and sectoral missions has been critical in enabling less-developed states to converge with the national average. Going forward, Union and states together can deepen these equalisation mechanisms to ensure balanced growth, while encouraging states to harness their own comparative advantages.
CSS remain the most visible manifestations of Centre-State cooperation. While implementation has sometimes been challenged by rigidities or compliance burdens, the Union Government has already initiated reforms, such as consolidation of schemes in the 2025 Budget to reduce fragmentation and increase flexibility. Schemes like PMJAY (health) and PMAY (housing) have delivered significant national-level outcomes, but future improvements can include providing states greater room for contextual adaptation. These refinements will help align national objectives with regional priorities, ensuring more efficient delivery of benefits to citizens.
The GST Council has emerged as a global exemplar of cooperative decision-making, ensuring all states have an equal voice. Building on this success, similar institutional platforms can be further strengthened in other domains. The Inter-State Council, for instance, has significant potential to serve as a proactive forum for policy coordination and dialogue.
The Union has signalled openness to revitalising such bodies, ensuring fiscal and governance issues are resolved through structured consultation. By fostering regular, empowered forums for dialogue, India can further enhance trust and efficiency in Centre-State relations.
Strengthening consultative mechanisms, ensuring transparency in fiscal transfers and maintaining impartiality in institutional processes will continue to bolster trust and national unity
Political differences between Union and state governments are inevitable in a vibrant democracy. Yet the constitutional vision of federalism anchored by the Union’s consistent support to all states irrespective of political complexion has remained a guiding principle. Initiatives like “double-engine growth” emphasise the benefits of alignment, but the Union has also extended full cooperation to opposition-led states in times of crisis, from disaster relief to pandemic management.
As India enters an era of coalition politics and regional assertiveness, it is imperative to nurture cooperative federalism as a shared ethos. Strengthening consultative mechanisms, ensuring transparency in fiscal transfers and maintaining impartiality in institutional processes will continue to bolster trust and national unity.
India’s rise towards Viksit Bharat@2047 rests on a robust Centre–State partnership, anchored in the Constitution and enriched by international best practices. The Union Government has consistently demonstrated leadership in steering national development, from GST’s cooperative architecture to mission-mode programmes in infrastructure, health and digital governance. Building on these, the renewed federal compact must rest on the following guiding principles:
While governance should be delivered at the closest effective level, the Union provides the overarching framework ensuring equity, efficiency and standards across the country. States and local bodies can adapt interventions such as tailoring agricultural practices to local ecologies within the broad, nationally defined policy contours that safeguard unity of purpose.
Going forward, predictable, transparent transfers can be further complemented by long-term Union commitments that enable states to design context-specific policies, while remaining aligned with the national development roadmap
The Union has already institutionalised rule-based transfers through Finance Commissions, GST compensation and centrally sponsored schemes. Going forward, predictable, transparent transfers can be further complemented by long-term Union commitments that enable states to design context-specific policies, while remaining aligned with the national development roadmap.
The Union has consistently shifted the focus of governance from outlays to outcomes. Extending this approach, greater flexibility for states can be paired with performance-linked Union allocations tied to SDGs, climate goals and flagship missions. This dual emphasis on autonomy and accountability strengthens cooperative federalism without diluting national priorities.
The Union’s initiatives like Digital India and India Stack already provide the backbone for data-driven governance. Extending this to a federal scale through shared dashboards, federated databases, and joint monitoring systems will allow real-time collaboration. Union stewardship ensures interoperability, security, and trust across states.
Public finance reforms are pivotal for state empowerment, particularly amid rising debt levels post-COVID.
Extend conditional borrowing thresholds (e.g., 0.5% of GSDP) contingent upon reform benchmarks in sectors such as power, agricultural marketing and urban governance. The 2025 budget’s incentives for mining and financial sectors provide a template.
Augment transparency and scrutiny of off-budget liabilities and guarantees. Develop preemptive indicators for state indebtedness vulnerabilities, integrating RBI oversight.
Bolster state proficiencies in outcome-oriented budgeting; digital treasury operations; and real-time expenditure monitoring. Collaborate with the Reserve Bank of India (RBI), Comptroller and Auditor General (CAG) and state finance commissions for capacity augmentation, including training programs.
Cultivate inter-state knowledge ecosystems through innovation indices; sectoral performance analytics; and peer collaboration networks. Promote state-initiated innovations in universal basic services; sustainable transition frameworks; and digital governance and citizen engagement mechanisms.
India’s odyssey toward 2047 must be collaborative. The Centre should not unilaterally orchestrate the agenda; states must serve as equitable collaborators in conceptualisation, implementation
Inherent in a pluralistic democracy are political variances between the Centre and states. Nonetheless, federalism must be consecrated as a constitutional precept, rather than subordinated to political expediency. Cooperative governance demands political sagacity; administrative impartiality; and institutional protections.
The 2024 elections’ coalition outcomes have revitalised federal discourse, emphasising consensus over centralisation. Challenges like delimitation and census delays in 2025 highlight the need for apolitical reforms.
India’s odyssey toward 2047 must be collaborative, multilevel and institutionally resilient. The Centre neither can nor should unilaterally orchestrate the agenda; states must serve as equitable collaborators in conceptualisation, implementation and oversight. The ensuing iteration of federalism must transition from compliance-centric to outcome-centric modalities, from hierarchical control to mutual co-creation and from vertical subordination to horizontal interdependence.
By addressing fiscal imbalances, enhancing institutions and fostering trust, India can realise Viksit Bharat – a beacon of inclusive development. This renewed compact will not only propel economic targets but also uphold democratic values, ensuring prosperity for all citizens by 2047.
India’s journey over the past seven decades has been shaped by two foundational principles: democracy and federalism. These are not just constitutional concepts, but living realities that give the nation both resilience and direction. Democracy has ensured that citizens participate in governance, hold institutions accountable and shape the country’s destiny through their collective voice. Federalism, on the other hand, has allowed governance to adapt to India’s vast diversity—linguistic, cultural, economic and social— cross 28 states and eight union territories. Together, they form the architecture within which India must now pursue its most ambitious goal: becoming a developed nation by 2047.
India’s aspirations for 2047 are anchored in three interconnected goals—growth, inclusion and sustainability. Each represents both a promise and a challenge, requiring the coordinated effort of the Union and the states.
Growth remains the first pillar. The vision is bold: to build a $30 trillion economy by the centenary of independence, with per capita incomes between $14,000 and $18,000. Such targets cannot be achieved without states playing a central role. Already, many states—Andhra Pradesh, Telangana, Uttar Pradesh and Tamil Nadu among them—have announced their own roadmaps, some aiming to reach developed status by 2030. This competitive spirit among states is not a weakness but a strength, for it channels diversity into a shared national momentum.
Inclusion is the second pillar. Growth by itself is not enough unless it translates into quality jobs, access to health care, education, housing and social protection. Inclusive growth demands that every citizen, regardless of region or background, experiences the benefits of prosperity. Life expectancy, infant mortality and other human development indicators must converge across states. The aspiration is not just to create wealth but to distribute opportunity more fairly and expand human capabilities.
Sustainability forms the third pillar, ensuring that progress does not come at the expense of future generations. India has pledged to achieve net-zero emissions by 2070, while already securing half of its energy capacity from renewable sources. Beyond policy, the vision extends to individual lifestyles—emphasising that the choices of citizens, when aligned with environmental goals, are equally important. Growth that erodes the planet’s foundations cannot be considered true development; sustainability makes Viksit Bharat both durable and ethical.
The role of states is central to this transformation. They account for nearly 60% of public expenditure and are responsible for delivering essential services such as education, health, agriculture, skill development and urban infrastructure. The nation’s progress, therefore, is inseparable from the performance of its states. If every state becomes an engine of robust, inclusive and sustainable growth, India’s aspiration of becoming a developed nation will naturally follow.
Over the decades, the federal framework has undergone significant evolution. In the early decades after independence, centralis ed planning through the Planning Commission dominated policy, often imposing a top-down approach. With economic reforms in the 1990s, however, the role of states expanded dramatically. They became the principal actors in attracting both foreign direct investment and domestic capital, while also gaining more fiscal space through successive Finance Commissions. The replacement of the Planning Commission with NITI Aayog in 2015 symbolised this shift—towards collaborative, cooperative federalism rather than centralised control.
Human development has shown a more encouraging trend. Indicators like life expectancy and infant mortality are converging, with less developed states gradually catching up to leaders like Kerala
The creation of the GST Council was another milestone, representing how Union and state governments can come together to design and manage a nationwide taxation system. Far from eroding federalism, such institutions have strengthened it by ensuring that diverse voices shape common rules.
Yet India’s diversity has also produced sharp economic disparities across states. While some regions have surged ahead, others have lagged, creating divergence in per capita incomes. Evidence shows that richer states such as Maharashtra, Gujarat and Karnataka have grown faster than poorer states like Bihar and Uttar Pradesh. The result is widening interstate disparities in economic output.
However, human development has shown a more encouraging trend. Indicators like life expectancy and infant mortality are converging, with less-developed states gradually catching up to leaders like Kerala. This convergence is expected, as improvements in basic services yield faster gains in poorer regions. It reflects the potential of inclusive policies and targeted interventions.
Demographics add another layer of complexity. While states such as Kerala will see 17% of their population in the elderly category by 2036, Bihar’s figure will remain closer to 8%. Younger populations in Bihar, Uttar Pradesh and Madhya Pradesh represent a demographic dividend that, if harnessed through education and job creation, could transform India’s growth trajectory. The challenge is to ensure that this potential does not go unrealised.
The fiscal health of states has emerged as one of the most critical factors shaping their ability to deliver development. A recent NITI Aayog Fiscal Health Index highlighted wide variations. Odisha, Chhattisgarh, Goa, Jharkhand and Gujarat were among the top performers, demonstrating effective revenue mobilisation, expenditure management and fiscal prudence. By contrast, states such as Punjab, Kerala, West Bengal and Andhra Pradesh struggled, burdened by rising deficits and growing off-budget liabilities.
These fiscal imbalances are not just bookkeeping issues—they directly affect the capacity of states to invest in infrastructure, social programs and sustainable growth. Transparent and consistent fiscal management, therefore, is not optional; it is the foundation upon which the aspirations of Viksit Bharat rest.
Among the many institutions shaping India’s federal framework, the Finance Commission occupies a unique place. Tasked with recommending the distribution of tax revenues between the Union and the states, it has consistently tried to reduce inequalities
Among the many institutions shaping India’s federal framework, the Finance Commission occupies a unique place. Tasked with recommending the distribution of tax revenues between the Union and states, it has consistently tried to reduce inequalities across regions. Its use of the “income distance” criterion ensures that poorer states receive more funds to improve services in health, education, water and sanitation.
This approach, however, creates tensions. Richer states argue that they are penalised for their efficiency, receiving less in return for their stronger performance. The Finance Commission must constantly balance the need for equity with the demands of efficiency, ensuring that the federation remains both fair and functional. Without such balancing, disparities could widen further, threatening social cohesion.
Studies of economic growth across states highlight several key drivers. Infrastructure development, investment in social sectors, urbanisation and the balance between credit and deposits all play vital roles. States that combine physical infrastructure with human development tend to perform best. The lesson is clear: progress requires a holistic approach, not just roads and factories, but also schools, hospitals and skill-building initiatives.
India’s size and diversity mean that contradictions are inevitable. The British economist Joan Robinson once observed that whatever is true about India in one region, the opposite is likely to be true in another. In Kerala, social indicators may be high, while in Bihar, demographics provide the advantage. In Punjab, challenges in agriculture persist, while in Gujarat, industrial growth thrives. Rather than viewing these contradictions as weaknesses, they can be harnessed as strengths, encouraging states to innovate, compete and learn from each other.
Decentralisation within states is as important as cooperation between states. Empowering panchayats and municipalities ensures that development reaches every community. Local governance can address unique needs more effectively than distant state capitals, making democracy truly participatory at the grassroots level.
The example of GST reform illustrates the promise of cooperative federalism. Union and state governments, despite differences, crafted a consensus-driven framework to manage one of the world’s largest taxation systems. This spirit of collaboration must extend beyond taxation to other areas—health, education, infrastructure and climate action.
India’s ambition to become a developed nation by 2047 is bold, but achievable. It demands growth that is fast and inclusive, development that is sustainable and governance that strengthens democracy and federalism. States must rise to the occasion, competing and cooperating, innovating and learning, so that the sum of their progress becomes greater than its parts.
Recognising states that demonstrate exemplary work in governance and development plays a crucial role in strengthening India’s growth story. By presenting successful initiatives as models for others to emulate, such recognition builds a culture of healthy accountability and continuous improvement. It also reflects the essence of democracy and federalism—systems that thrive on negotiation, shared responsibility and the collective will to pursue national progress.
In this environment, one of the most pressing questions concerns the financing of growth and development. India’s federal structure is distinctive: while the Centre collects a large share of revenues, the states shoulder the bulk of expenditure. In numerical terms, states raise around 35 percent of revenues but are responsible for nearly 60 percent of total government spending. Increasingly, they are tasked with preparing ambitious growth visions aligned with the goal of a Viksit Bharat, making the financing question unavoidable. Borrowing provides only limited space, constrained as it is by fiscal responsibility laws. The answer, therefore, circles back to taxation—the most durable foundation of public finance.
India’s revenue effort over the past four decades reveals both progress and challenges. The tax-to-GDP ratio has improved from less than 14 percent in the early 1980s to about 18.5 percent today. This represents a nearly five percentage point rise over 45 years—a notable achievement given the complexities of a developing, diverse and large federal economy.
States have steadily improved their own tax revenues, which have grown from just above 4 percent of GDP in 1980 to around 7 percent today. By contrast, the Centre—despite collecting about two-thirds of the country’s total revenues—has experienced greater volatility. Periods of buoyancy have been punctuated by sharp downturns, reminding policymakers that reforms must be consistent and that resilience requires diversification of the base.
The broader lesson is constructive: reforms and stronger administration, pursued patiently over time, can deliver enduring improvements. Yet, as expenditure demands continue to expand—whether for infrastructure, social protection, or human capital development—further strengthening the revenue system becomes essential.
The GST represented a landmark structural reform aimed at creating a unified and efficient system. Intended to be revenue-neutral, GST’s early years saw transitional challenges. It remains a powerful tool for simplification and efficiency
India’s fiscal history is marked by several critical reform phases, each bringing lessons and building blocks for the future.
The structure of taxation has evolved significantly. Direct taxes—comprising income and corporate taxes—have risen steadily in share, while indirect taxes, once dominated by excise and customs and now by GST and customs, have declined. This shift reflects India’s growing formalisation and the progressive intent of the system.
Yet, direct tax buoyancy has been less robust since 2008. Income tax collections grew consistently until that point but have since flattened, underlining the need to broaden the base.
A central challenge remains the narrow tax base. Many individuals and enterprises remain outside the system. For example, agriculture continues to lie beyond the reach of direct taxation. While indirect taxes touch parts of the sector, the absence of income taxation creates a structural differentiation between agriculture and non-agriculture. Whether this differentiation is beneficial or distorting remains a live policy question.
Similarly, India’s large informal sector limits revenue potential. Many micro, small and medium enterprises (MSMEs) weigh the costs of compliance against benefits and often find the latter insufficient. Addressing this imbalance requires more than tax reform. It calls for policies that make participation in the formal economy valuable—such as access to affordable credit, market opportunities and social protections that are contingent on formalisation.
Numbers alone do not tell the full story. Perceptions of fairness strongly influence compliance. In a small survey of around 100 respondents, views diverged sharply. A large cluster felt the taxes they paid were fair and that exemptions available to them provided balance. Another group believed they paid too much and preferred lower rates without exemptions. These contrasting positions highlight the complexity of designing a tax system that can satisfy divergent expectations.
When asked why tax evasion occurs, the most common response was that taxes seem high relative to the benefits citizens perceive they receive. This underscores the importance of communication. Governments must do more than collect revenues—they must also convey how those revenues are being used. Infrastructure, health, education and social welfare are funded through taxation, yet if citizens do not clearly see or understand this linkage, perceptions of unfairness persist.
Transparent communication, therefore, becomes as important as structural reform. Demonstrating the impact of revenues on everyday lives—better roads, schools, hospitals, digital infrastructure—can build trust and strengthen the social contract.
Broadening the tax base, reducing distortions, integrating the informal sector and addressing sectoral gaps like agriculture remain priorities. So too does ensuring that exemptions and concessions are aligned with efficiency
India’s journey in tax reform is both a story of achievement and of opportunity. From 14 percent to 18.5 percent in tax-to-GDP ratios, from 4 percent to 7 percent in state revenues and from cascading indirect taxes to GST, progress has been tangible. Yet the tasks ahead are equally clear.
Broadening the tax base, reducing distortions, integrating the informal sector and addressing sectoral gaps like agriculture remain priorities. So too does ensuring that exemptions and concessions are aligned with efficiency rather than eroding collections. Administrative reforms—particularly those driven by technology—can further strengthen compliance and monitoring.
Above all, building trust through transparency is vital. Citizens who feel that taxes are high without corresponding benefits are less likely to comply voluntarily. Clear communication about how revenues fund public goods can correct this imbalance, encourage broader participation and ensure that growth is financed fairly and sustainably.
The intersection of democracy, federalism, finances and development is not always easy to define. Yet, it is in exploring this meeting point that one begins to understand both the challenges and the opportunities before the country. Two fundamental statements set the tone. First, democracy is desirable because it nurtures development while remaining mindful of justice. Second, democracy alone provides a credible covenant for an egalitarian and inclusive social order. These principles are not abstract ideals; they are guiding lights for how governance, federalism and development must move forward together.
The independence achieved after long struggle carries deep meaning that must be preserved with equal determination. Passing this message to younger generations, particularly students and future leaders, becomes crucial. Around the world, established democracies show signs of strain, which underscores the importance of remaining alert to protect India’s democratic scheme. The task is not just to celebrate independence, but to sustain it through responsible institutions, engaged citizens and inclusive development.
At the heart of democracy lies the electoral process. Elections give legitimacy to governance and embody the principle of equal participation. Preparing electoral rolls, providing opportunities for inclusion and ensuring fairness are critical parts of this system. The process is highly structured, giving space at every stage for people to participate.
There are anecdotes that illustrate the challenges as well as the resilience of the system. In one instance, a repoll was ordered in a constituency where a powerful politician was accused of manipulating officials. The reshuffling of polling personnel disrupted entrenched interests and ensured a fairer outcome. Such steps show that while attempts to influence the process may exist, impartial systems backed by vigilance can preserve credibility. The responsibility extends to political parties at the booth level, whose role in assisting citizens to get enrolled and exercise their right to vote becomes vital. Strengthening this framework ensures that every citizen’s voice is counted and the covenant of democracy remains intact.
Personal relationships between leaders have historically influenced federal cooperation as well. Examples show that when rapport exists between prime ministers and chief ministers, states benefit through smoother access to resources and support
India’s federal structure thrives on cooperation. It is inherently a process of give and take between the central government and the states. Grievances and achievements coexist, but it is the spirit of dialogue that strengthens the system. Platforms such as the Inter-State Council need to be revitalised to provide space for discussions. The GST Council has emerged as an effective forum, demonstrating how consensus-building can lead to constructive outcomes.
The All India Services also play a pivotal role in the federal framework. Officers serving across states bring stability, continuity and impartiality to governance. Their ability to adapt and contribute in different regions shows why the framers of the Constitution created this institution. It strengthens the democratic structure by ensuring fairness across diverse political and administrative contexts.
Personal relationships between leaders have historically influenced federal cooperation as well. Examples show that when rapport exists between prime ministers and chief ministers, states benefit through smoother access to resources and support. This highlights how federalism is shaped both by institutional design and by human trust.
Finances form the crux of federal relations. The Finance Commission provides a mechanism for resource distribution, but states often feel dissatisfied. While the share of central revenues for states has reached 41–42 percent, concerns remain about adequacy and flexibility. States differ in their capacity to take advantage of schemes, with some excelling in utilising funds while others struggle to absorb available resources.
Borrowing limits present another challenge. Ambitious states often seek to borrow more, but unchecked debt raises concerns about burdening future generations. Political cycles of five years encourage immediate spending, sometimes at the cost of long-term fiscal responsibility. Escalating expenditures on salaries and pensions add to the strain, reducing space for developmental spending. The balance between revenue, expenditure and borrowing remains delicate and must be handled with care to avoid undermining development goals.
Discussions on federalism often overlook the relationship between states and local bodies. Constitutional provisions list 18 functions meant to be transferred to urban local bodies and panchayats, yet no state has fully implemented this mandate. As a result, local bodies remain constrained in both authority and resources.
Urban bodies, in particular, face increasing demands without the freedom to borrow or the capacity to generate adequate resources. Expectations around mobility, infrastructure and quality of life in cities highlight the gap between responsibilities and capabilities. Without empowering local bodies, decentralisation risks becoming symbolic rather than effective. Finance Commissions occasionally provide relief or incentives, but performance across states has been uneven.
The consequences are visible in everyday concerns such as potholes, flooding and urban infrastructure gaps. Citizens may complain about these failures, but the root problem often lies in resource constraints and lack of empowerment at the local level. Strengthening local bodies, both administratively and financially, is essential to sustain the federal and democratic structure.
Institutions are the backbone of democracy and federalism. Bodies such as the Election Commission, the Comptroller and Auditor General and the Finance Commission must remain strong and impartial. Independent oversight ensures fairness, accountability and credibility
Development is a joint responsibility across all levels of government. Reducing poverty, improving health parameters and raising educational standards are central to inclusive progress. Yet, focus often shifts to peripheral debates—such as disputes between governors, chancellors and state governments in higher education—while the core issues of quality and outcomes remain unattended.
Constructive examples illustrate what can be achieved. In Meghalaya, implementation of NREGA through village employment councils created participatory governance structures. These not only delivered immediate benefits but also built long-term institutional capacity. Such experiences show how central schemes, when localised effectively, can create lasting change and strengthen grassroots democracy.
Institutions are the backbone of democracy and federalism. Bodies such as the Election Commission, the Comptroller and Auditor General and the Finance Commission must remain strong and impartial. Independent oversight ensures fairness, accountability and credibility.
Neutral voices, including senior citizens with experience and perspective, can also play a role in guiding governance. Their contributions, when detached from political bias, add value to the process of strengthening institutions. Dialogue platforms must be preserved and depoliticised so that discussions remain focused on development and governance rather than partisan gain.
The vision of a “Viksit Bharat” rests on the strength of democracy, the balance of federalism and the fairness of financial arrangements. Achieving it requires correcting weaknesses at every level—whether in elections, resource distribution, local body empowerment, or institutional oversight. Citizens themselves must play an active role in demanding accountability and participating in the democratic process.
The Constitution continues to guide this journey, offering both structure and direction. It is not enough to celebrate its ideals; they must be practiced daily in governance and public life. By embracing mutual appreciation, cooperative spirit and responsible fiscal management, India can build a democracy that is just, inclusive and development-oriented.
The challenges are real—strained finances, incomplete decentralisation and political pressures—but the opportunities are equally powerful. With vigilance, cooperation and strengthened institutions, the path forward remains within reach. The collective responsibility is clear: to preserve democracy, nurture federalism and drive development that benefits every citizen.
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Inclusion is the first magazine dedicated to exploring issues at the intersection of development agendas and digital, financial and social inclusion. The magazine makes complex policy analyses accessible for a diverse audience of policymakers, administrators, civil society and academicians. Grassroots-focused, outcome-oriented analysis is the cornerstone of the work done at Inclusion.
