A federal state is a political contrivance intended to reconcile national unity and power with the maintenance of state rights. The method through which federalism attempts to reconcile the apparently inconsistent claims of national sovereignty and of state sovereignty involves the formation of a constitution under which the ordinary powers of sovereignty are divided between the central government and the separate states or provinces. This division powers me, however, vary under every different federal constitution but largely the general and core principle on which it should rest remains the same. The term federalism originated from the Latin word “foedus”, which means treaty or agreement. Therefore, a federation is a new state policy combining the principle of centralisation and power of non-centralised units. India comprises different states with diverse cultures where adaptation of federalism is pivotal. The idea of Cooperative Federalism in India enhances the centre-state relationship as well as relationships between states and local governments.

Goods and Services Tax, GST, Federalism, Fiscal Relations, Centre-State Relations, Fiscal Federalism,