(a) "The colonial legacy is responsible for many administrative problems in independent India as the role of company agents and…

(a) Colonial legacy

The colonial legacy is not a historical footnote; it shaped the administrative grammar of independent India. The East India Company's commercial hierarchy - writers, factors, junior and senior merchants - working through zamindars and revenue intermediaries, built a state whose first task was revenue extraction, control and law-and-order; after the Diwani of Bengal (1765) and the Regulating Act (1773), these traders became collectors, judges and governors. As company agents and traders evolved into Magistrates, Governors and Civil Servants, the ICS succeeded the Company’s administrative cadres and later became the IAS, carrying forward an elitist, hierarchical and status-quoist culture. The district collector, police hierarchy and secretariat system retained the colonial logic of vertical command, alienation from the masses and distrust of local self-government. Sardar Patel defended the All India Services in the Constituent Assembly (October 1949) precisely because this cadre offered continuity and unity, and Paul Appleby's reports (1953 and 1956), while ranking India's administration among the dozen or so most advanced in the world, criticised its excessive procedural controls, reluctance to delegate, and the Finance Ministry's pre-audit grip on other ministries - features that capture this continuity. His recommendations led to the Organisation and Methods Division and the Indian Institute of Public Administration (both 1954). The result is a system that can implement directives efficiently but often struggles with participatory planning, local accountability and developmental innovation. This colonial habit of ruling through files, not forums, made administration a closed system, where policy was formulated at the top and filtered down through district and secretariat channels.

(b) Union fiscal reach

Fiscal federalism in India is not merely a division of subjects; it is also a division of resources. The Union contributes to State and Concurrent List subjects through constitutional and institutional channels. Article 270 provides for sharing of Union taxes through the divisible pool on Finance Commission (Article 280) recommendations; Article 275 provides statutory grants-in-aid to needy states; Article 282 permits discretionary grants for any public purpose and is the legal basis of most Centrally Sponsored Schemes; Article 293 regulates state borrowing and lets the Union lend to states; and Article 360 provides for a financial emergency, enabling the Centre to direct states to observe canons of financial propriety. Disaster response is governed mainly by the Disaster Management Act, 2005, and Article 355’s duty to secure conditions of governance. The Finance Commission, Centrally Sponsored Schemes and disaster relief funds operationalise this reach; the 15th and 16th Finance Commissions both set states' share of the divisible pool at 41%. The Commission’s recommendations anchor the divisible pool and grants, while CSS often carry matching grants and central guidelines; after a sub-group of Chief Ministers reported in 2015, CSS were grouped into "core of the core", core and optional schemes, with most core schemes funded 60:40 between Centre and states (90:10 for north-eastern and Himalayan states). The pros are real: equalisation among states, pursuit of national priorities, and crisis management when states lack capacity. PMGSY and Swachh Bharat Mission show how Union funding can accelerate infrastructure and sanitation. But the cons are equally serious. Vertical imbalance gives the Centre leverage, and the rising share of cesses and surcharges, which are not shared with states, shrinks the divisible pool; conditionalities can distort state priorities; and the proliferation of CSS may reduce state autonomy by making them implementers of centrally designed programmes.

(c) Cooperative federalism

The spirit of cooperative federalism is hindered by divergent political interests and financial constraints. When opposition parties rule states, coordination can become competitive, with states resisting Union schemes or negotiating for greater resources. Competitive federalism may strengthen bargaining but can undermine shared national goals. When political cycles differ, states may use policy delays or selective implementation to protect their interests, weakening the cooperative ethos. Financial constraints deepen the problem: the end of GST compensation in June 2022, a divisible pool shrunk by cesses and surcharges, Union-imposed borrowing limits, and FRBM pressures limit states’ ability to invest in health, education and rural development. In February 2024 the Karnataka and Kerala governments protested in Delhi against alleged fiscal discrimination, and disputes such as the withholding of Samagra Shiksha funds from Tamil Nadu over the PM SHRI scheme show how conditional transfers can become political weapons. Institutions meant to promote cooperation—Inter-State Council, NITI Aayog and GST Council—have mixed effectiveness. The Inter-State Council remains underused, having last met in 2016; NITI Aayog has improved policy dialogue but lacks binding authority; the GST Council works well on tax rates but faces disputes over compensation and state finances. Strengthening cooperative federalism requires implementing Sarkaria Commission recommendations on inter-state coordination, adopting Punchhi Commission’s fiscal federalism reforms, giving states a clearer voice in CSS design, and ensuring timely, transparent transfers.