Indian polity is neither federal nor unitary

The Constitution contains all the basic features of a federation as shown below

• Set up a dual polity- the Union Government and the State Governments
• Legislative, administrative and financial powers are divided between the two levels of government. All legislative powers are classified into three lists-the Union List, the State List and the Concurrent List. Subjects of national importance like banking, national security, currency, defence, railways, post and telegraph, foreign affairs, citizenship, etc. have been given to the Union Parliament, being placed in the Union List. Items of provincial and regional importance like police, local self-government, agriculture, law and order, health and entertainment have been given to the States, being a part of the State List. Neither can legislate on the other’s List. However, under rare and special circumstances, Union Parliament can legislate on items in the State List. Concurrent List has subjects which are of common interest such as socio economic planning, marriage and divorce, adoption, succession, forests, transfer of property, preventive detention, education, civil and criminal law, etc. The Union Parliament and the State Legislatures enjoy co-equal powers to make laws in regard to this List. However, if there is a conflict between a Union law and a State law, the law made by the Union Parliament would prevail over the State law, according to the doctrine of federal supremacy

               Each level of government being provided with its own sources of revenue

         Supremacy of the written Constitution 
               Rigid constitution 

             Independent judiciary to settle disputes among the federal units. Supreme Court under Art. 131 has exclusive and original jurisdiction in federal matters.

Even while the above listed essential features of federalism are found in the Indian Constitution, there is a strong unitary tilt. For example, states are not – ‘indestructible’ as in the USA. Union Parliament can not only alter the area and boundaries of a state but can also abolish a state. The Parliament has the residuary powers- that are powers that may be left out of the three Lists detailed above. Emergency powers (Art. 352 and 356) of the Union Government can also turn the country into a unitary system.

Since 1992, with the making of the 73rd and 74th Amendment Acts related to Panchayati-raj and Nagarapalika institutions respectively, Indian Constitution has added another tier to the federal system. However, powers of finances of the Panchayats are still left to the discretion of the state governments