The principle of subsidiarity holds that governmental functions should be performed at the lowest level capable of performing them effectively and transferred upward only when that level lacks the capacity to act. It reverses the top-down conception of the nation-state.
Power does not descend from a sovereign capital to subordinate units; it ascends from citizens to communities, from communities to States, and, where necessary, to the Union.
In this conception, the community represents the lived reality of governance, while the Union is an abstraction to perform tasks beyond local capacity. Centralisation is not the natural condition of governance but an exception requiring justification.
Mature federations have institutionalised this logic in their constitutional design. In the United States, the principle is embedded in the Tenth Amendment, which reserves all undelegated powers to the States or the people. Al-though federal authority has expanded through judicial interpretation, the constitutional presumption continues to favour State competence.
The European Union explicitly incorporates subsidiarity in Article 5(3) of the Treaty on European Union (1992), permitting Union action only when objectives cannot be achieved by Member States. Switzerland offers the clearest constitutional embodiment. Sovereignty originates in the Cantons, and Article 5a of the Swiss Constitution requires subsidiarity to guide the allocation and performance of public functions. The Confederation exercises only those powers expressly ceded to it.
The Constitution of India departs markedly from subsidiarity. The Seventh Schedule operates on a presumption of central competence, reflected in the breadth and granularity of the Union and Concurrent Lists, combined with the allocation of residuary powers to the Union under Entry 97. The State List is constrained. This design — shaped by the anxieties of Partition, the integration of princely States, and fears of secession — reflects a mistrust of local governance.
Several allocations illustrate the anomaly. The Union List includes specific universities, museums, and cultural institutions, as well as operational matters such as port quarantine hospitals. The Concurrent List extends to vagrancy and charities—areas that require sensitivity to local conditions.
Even in Concurrent List subjects, subsidiarity is weakened by Article 254(1), which accords primacy to Union law in cases of conflict. Parliament often legislates exhaustively in concurrent fields, leaving minimal space for State initiative. The result is a regime of national codes that flattens diversity and stifle State experimentation.
The absence of subsidiarity is evident across sectors. Industrial policy depends heavily on land availability, labour markets, infrastructure, and regional economic ecosystems — core State concerns. Subsidiarity would place industrial policy with States, encouraging clustering and inter-State competition. Instead, Entry 52 of the Union List enables Parliament to assume control over industries in the “public interest,” a power widely used through the Industries (Development and Regulation) Act, 1951.
Ports provide another illustration. Globally, port governance is predominantly local or regional. In the United States, most ports are administered by local authorities; in Australia, by the States; in Germany, by States; and even in China by municipal governments. India, however, is an outlier. Major ports fall under the Union List, while even minor ports — many of them fishing harbours — are placed in the Concurrent List, denying States exclusive authority.
Similarly, fisheries regulation reveals artificial jurisdictional divisions: “Fisheries” fall within the State List, but “Fishing and fisheries beyond territorial waters” lie in the Union List. Economic case for subsidiarity Authority is most effective when located closest to knowledge, consequences, and accountability. The economic rationale was articulated by Wallace E Oates in Fiscal Federalism (1972). His ‘Decentralisation Theorem’ demonstrated that in large, heterogeneous societies, central governments cannot tailor policies to diverse regional needs. Uniform national standards become blunt instruments that rarely serve any constituency well. Decentralised governance allows policies to align with local conditions.
This insight is reinforced by the model developed by Charles M Tiebout. When states and local governments design different combinations of taxes and services, citizens can choose jurisdictions that best match their preferences — a process of “voting with one’s feet”. This mobility disciplines governments, rewards responsiveness, and creates a quasi-market mechanism for public governance.
In his essay The Use of Knowledge in Society (1945), Friedrich August von Hayek described the ‘knowledge problem’: effective decision-making depends on knowledge of the “particular circumstances of time and place” — knowledge that is dispersed, contextual, and tacit. Such knowledge cannot be aggregated or transmitted upward to a central authority with- out distortion or delay. Centralised decision-making operates in abstraction, detached from local realities.
The logic of subsidiarity also finds support in management theory. In The Age of Paradox (1994), Charles Handy described subsidiarity as “reverse delegation”: authority should reside with those closest to the work. Removing decision-making power from operational units demoralizes employees, slows responses, and weakens accountability.
Empirical support is provided by the work of Elinor Ostrom. In Governing the Commons (1990), Ostrom demonstrated that polycentric systems —characterised by multiple autonomous centers of decision-making—often outperform centralized bureaucracies. Studying shared resources across countries, she found that local communities manage complex resources more sustainably than distant authorities. Their success derives from contextual knowledge, monitoring, and social trust — attributes that central agencies lack.
For citizens, the absence of subsidiarity manifests as a daily failure of governance. Local problems require local knowledge. A village resident knows whether a water tank needs desilting or waste remains uncollected—knowledge that distant authorities cannot possess.
Subsidiarity ensures that decisions are taken by those closest to the problem. It also strengthens accountability. Citizens can hold local representatives responsible for outcomes. When the Union assumes responsibility through centrally sponsored schemes, the chain of accountability becomes blurred.
India requires a constitutional renaissance anchored in subsidiarity. The pyramid of power must be inverted, placing citizens — the true sovereigns — at its foundation. Authority should flow upward from them to local institutions, to the states, and, where necessary, to the Union. To be concluded
The author is retired IAS officer of Tamil Nadu cadre, former Vice-Chancellor of Indian Maritime University, Chennai, and Member, High-Level Committee on Union-State Relations constituted by the Govt of Tamil Nadu