If the social-justice argument provides the moral case for centralisation, the control argument provides its main technical excuse.
The claim is simple: a complex, linked economy cannot work if its parts are left to talk among themselves. How can a power grid stay stable if states draw power on their own? How can rivers be shared fairly if upstream states dam them? How can markets work if each State has different taxes?
The centralist answer is hierarchy.
To stop chaos and "beggar-thy-neighbour" moves, there must be a boss a Leviathan given the power to force solutions from above. In this view, States represent friction; the Union represents order. Without a strong Centre, India would fall into a mess.
This thinking is a mistake. It conflates coordination with command, assuming that alignment of behaviour requires coercive hierarchy. Modern institutional theory, comparative federal practice, and India’s own constitutional experience suggest the opposite: durable coordination is more often achieved through negotiated rules, shared standards, and mutual incentives than through central command.
The best proof that order does not need a central boss is the international system. There is no world government with the power to force countries to obey.
Yet, the world is not in a state of constant war.
Through treaties and shared rules, nearly 200 nations work together on very complex tasks.
Flights move across borders through shared safety rules without a “World Aviation Ministry”. Phones work globally because countries agree on common rules.
Shipping, mail, and trade all rely on cooperation, not a central boss. The Internet is the best example: a huge web of networks held together by shared rules, but run by no single person.
If scores of nations can work together without a global boss, it is a weak argument that India’s 28 States, bound by one Constitution and one citizenship, need heavy Union control to manage schools, health, or taxes. Indian states face a much easier task.
The lesson is clear: shared rules can keep order even among equals.
Modern institutional economics further undermines the hierarchy premise.
First, Nobel Laureate Ronald Coase demonstrated in The Nature of the Firm (1937) and The Problem of Social Cost (1960) that issues such as water sharing, infrastructure access, or environmental spillovers do not inherently require a sovereign commander; they require credible frameworks for negotiation and enforcement. Command becomes necessary only when bargaining institutions fail.
Second, Nobel Laureate Elinor Ostrom’s Governing the Commons (1990) overturned the assumption that shared resources must be centrally managed. Studying irrigation systems, forests, and fisheries, she showed that communities frequently develop rule-based governance arrangements that outperform bureaucratic control. Compliance flows not from coercion but from legitimacy, participation, and shared ownership of rules.
In short, coordination failures are institutional failures not proof that hierarchy is necessary.
Regulation in general produces three recurring pathologies: rule inflation, knowledge deficits, and regulatory capture.
Rule inflation: William Niskanen showed in Bureaucracy and Representative Government (1971) that bureaucracies behave as budget- and power-maximising institutions. Unlike private firms, regulators face no market discipline; success is measured by jurisdictional expansion, staffing, and rulemaking output. Regulation becomes an end in itself.
In Going by the Book (1982), Eugene Bardach and Robert A Kagan described the 'regulatory ratchet': rules are politically easy to add but difficult to repeal. Each perceived failure invites another layer of regulation. The ever-expanding rulebooks of bodies such as the University Grants Commission, All India Council for Technical Education, and National Medical Commission illustrate this phenomenon.
Knowledge problem: Even well-intentioned regulators confront a deeper limitation; they cannot know enough. Nobel Laureate Friedrich Hayek demonstrated in The Use of Knowledge in Society (1945) that the information required to govern complex systems consists largely of contextual knowledge which cannot be centrally aggregated.
James C Scott extended this insight in Seeing Like a State (1998), showing how governments simplify social realities to make them administratively legible. In doing so, they erase metis the local practical knowledge through which communities navigate complex environments. Uniform rules flatten diversity and frequently produce policy failure.
Capture and credibility: Nobel Laureate George Stigler’s The Theory of Economic Regulation (1971) demonstrated that regulation is often shaped by the industries it governs. Over time, regulators identify with the industries they oversee, enforcement weakens, and incumbents gain protection.
Even when the Union acts in good faith, its neutrality is questioned if it is also a political stakeholder. In disputes between states, Union intervention may be viewed through a partisan lens. Horizontal arrangements negotiated among states often command greater legitimacy.
India’s own experience exposes the weaknesses of command-centric coordination.
The University Grants Commission and All India Council for Technical Education, by moving far beyond their constitutional role of coordinating standards, have imposed pervasive micromanagement on universities and institutes while eroding institutional autonomy.
Despite this over-regulation, Indian universities and institutes remain largely absent from top global rankings.
Similarly, extensive regulation by the National Medical Commission, and earlier the Medical Council of India, has not produced excellence in medical education or healthcare outcomes.
The decentralist alternative is cooperative federalism in its true sense horizontal engagement among states, with the Union acting as a facilitator rather than a commanding authority.
Comparative experience illustrates this model. In the US, the Constitution allows states to form interstate compacts; the Port Authority of New York and New Jersey and the Colorado River Compact are prominent examples.
In the European Union, the “Open Method of Coordination” aligns national policies through benchmarks and peer review rather than central legislation.
In Australia, the National Cabinet brings the Prime Minister and State Premiers together as equals to coordinate national responses.
India’s Constitution already contains the foundations for such arrangements. A revitalised Inter-State Council under Article 263 could serve as a standing forum for negotiation.
A strong Union is indispensable, but its proper role is that of an umpire rather than a captain: setting the rules, ensuring fair play, resolving disputes, and facilitating cooperation.
When it attempts to play the game itself, it weakens both performance and legitimacy.
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 Government of Tamil Nadu
To be concluded