Federalism principle of government has to evolve differently

(Federation) refers to a multilevel system of government in which entities such
as states or province and subnational government share its power with a central
(federal) government. Federalism is a form of government in which sovereignty
or political power is divided between the central and the local government, so
that each of them within its own sphere is independent of the other (Robert
Gorson).  Federalism is not only a set of
fixed principle which is applicable to different historical conditions; rather
it is a principle of government has to evolve differently in different
situations. In a federal system, the central government cannot order the state
government to do something. The state government has its own power in which
they are not answerable to the central government. In the federal form of
government both the central as well as state government have responsibility and
separately answerable to the people related to political and economic issue of
the country. In the recent years, the issues on federalism and decentralization
attracted worldwide interest throughout the countries. Federation of India is
characterized by constitutional demarcation of financial powers and responsibilities
among the three levels of government, namely center, state and local government
(Joshi and Jain 2016). Federal financial structure, budgetary aspects and
fiscal transfers’ mechanism are the important factors which determine fiscal
system of any federation. The fiscal system refers to the mechanism through
which financial resources for the government and its agencies are procured,
channeled or raised, and the scale and pattern of allocation of such resources
is determined. In order to make a federal nation’s any layers of government
i.e., centre (federal) as well as state government should have a sound fiscal
position in the country. Difference forms of federalism as shown in figure 1.

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