Centre - State Relations and Federal Negotiations: A Comparative Study of Kerala under UPA and BJP Governments

Abstract

This paper offers a comparative analysis of Centre–State relations between Kerala and the Union government across two national regimes—the United Progressive Alliance (2004–2014) and the Bharatiya Janata Party–led National Democratic Alliance (2014–present). Framed by fiscal and bargaining federalism, it examines vertical devolution and the changing composition of Union taxes; the Goods and Services Tax (GST) compensation regime and its sunset; borrowing controls and the judicialisation of intergovernmental disputes under Article 293; disaster-relief cooperation and India’s stance on external assistance; and sectoral negotiations in health financing and large infrastructure. Using a qualitative, comparative-historical design that triangulates official reports, statutory documents, court orders, and credible policy analyses, the study finds that headline devolution rose after the Fourteenth Finance Commission, yet states’ effective fiscal space narrowed due to the expanding use of non-shareable cesses and surcharges. Kerala’s strategies accordingly shifted from Planning Commission–era committee processes to rules-based bargaining in the GST Council, coalition-building with peer states, and constitutional litigation. Cooperation remained feasible in domains with aligned incentives (for example, PM-JAY convergence), while contention intensified where central gatekeeping was strong (for example, borrowing limits, major rail infrastructure, and external-aid protocols). Policy directions include capping or sharing non-shareable levies, clarifying Article 293 practices, articulating a post-2026 GST revenue-risk framework, and strengthening a rules-based intergovernmental architecture.