Comment in 150 words: Implementation of GST and NEET is a major challenge to Indian federalism. (2018, 10 Marks)
The Goods and Services Tax (2017) and NEET, the National Eligibility-cum-Entrance Test (from 2016), share a design. Each replaces differentiated state choice with one national instrument and justifies it by efficiency, in tax in one case and medical admission in the other. The federal challenge is real, but it differs in kind between the two.
GST: autonomy traded for voice
- The 101st Amendment (2016) folded most central and state indirect taxes into one levy to create a single national market. States gave up independent power over their largest own revenue, and with it the freedom to set rates and to design local taxes.
- Under Art. 279A, the Union holds one-third of the weighted vote and a resolution needs three-fourths. The Union therefore has an effective veto.
- The compensation guarantee ended in 2022, and the compensation cess itself ended in February 2026. States’ demand for a five-year extension was refused.
- GST 2.0 (September 2025) cut rates to two main slabs, and the revenue loss falls on states as well.
The counter-case is pooled sovereignty. States hold two-thirds of the vote, and the Council has worked almost entirely by consensus. In Union of India v. Mohit Minerals (2022), the Supreme Court held its recommendations persuasive, not binding, since Art. 246A gives both levels simultaneous power. This is cooperative federalism in the sense of Granville Austin.
NEET: uniformity without negotiation
- The 42nd Amendment (1976) moved education to the Concurrent List, and Entry 66, List I gives the Union power over standards. These provisions, and the National Medical Commission Act, 2019, ground NEET legally.
- A single test replaced state examinations, including admission to seats in colleges the states build and fund. Tamil Nadu’s A. K. Rajan Committee (2021) found that it disadvantaged state-board, rural and Tamil-medium students.
- Tamil Nadu’s exemption bill was reserved for the President and refused assent in 2025. The state has now filed an Art. 131 suit.
- The 2024 paper leak, which led to the Public Examinations (Prevention of Unfair Means) Act, 2024, weakened the case for a centralised test’s integrity.
Supporters point to the end of multiple examinations and capitation-fee abuse. They also point to a common merit standard in a Concurrent field where the Union’s law prevails under Art. 254.
Conclusion
Both reforms extend the Union’s reach. GST is a negotiated centralisation with a shared forum and consensus, and it remains a stress on federalism rather than a breach of it. NEET was imposed, with no institutional voice for states. It is the sharper challenge, and an opt-out or a state-quota model would restore balance.