Introduction
The COVID-19 pandemic tested India's federal structure in unprecedented ways. While health is constitutionally a state subject, the crisis saw unprecedented centralisation under the Disaster Management Act, 2005. The interplay between Union and state governments—and even local bodies—reveals both successes and fractures, prompting urgent reflection on the future of health federalism.
1. Centralised Response vs State Autonomy
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COVID-19 guidelines, national lockdowns, containment zone demarcations, and vaccine policy were largely driven by the Centre, under NDMA powers—often without prior state consultation, despite constitutional mandates.
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Critics argue this ignored India’s federal ethos, sidelining state prerogatives and triggering human suffering, especially among migrant workers.
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However, over time, cooperative mechanisms emerged. Weekly consultations, greater state discretion over containment and lockdowns, and adaptive federal coordination improved outcomes during later phases.
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2. Financial Strains on States
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Pandemic lockdowns devastated state revenues tied to liquor licenses, stamp duties, and local taxes, while expenditure increased sharply.
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States criticized inequitable fiscal transfers and reliance on PM-CARES fund (treated as CSR donations) instead of strengthening state relief efforts.
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This fiscal crunch hampered state capacity to manage health infrastructure, COVID testing and care, intensifying federal dependence.
3. Role of Third-Tier and Local Governments
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Panchayats and municipal bodies played frontline roles: contact tracing, isolation, food distribution, and sanitation—especially in Kerala, Odisha, and urban centers like Dharavi in Mumbai.
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Decentralized governance often made responses nimble and context-sensitive—e.g. BMC’s ward-level war rooms and Odisha’s empowerment of sarpanches under magistrate-equivalent powers.
4. Institutional Resilience & Intergovernmental Coordination
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States with higher public health investment and strong institutions—such as Kerala and Karnataka—fared better in crisis response, ICU capacity, and vaccine rollout.
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The absence of formal institutions akin to a health-sector GST Council or Inter-State Council meant coordination remained ad-hoc, contributing to policy friction, coverage variance, and resource disparities.
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5. Vaccine Policy: A Turnaround Flashpoint
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Initially, the Centre handed over vaccine procurement to states, sparking criticism due to cost, logistics, and equity concerns.
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By June 2021, the policy shifted back to centralised procurement and distribution, increasing uniform access and rationalizing costs.
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Opposition-ruled states, notably Kerala, alleged the health crisis exposed the cost of weak federalism and called for greater policy autonomy.
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6. Digital Health Governance & the Data Dimension
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The Centre-led National Digital Health Blueprint (NDHB) pushed for unified health data systems under federal control, raising concerns about state involvement and autonomy.
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Kerala’s controversy with a third-party contractor (Sprinklr) underscores the need for state-specific data governance frameworks and privacy protections.
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Federal Challenges for Health Reform
| Domain | Key Concern |
|---|---|
| Legislative Clarity | Need clearer demarcation between Union and State powers |
| Fiscal Autonomy | States need reliable resource frameworks for health response |
| Institutional Coordination | Persistent need for intergovernmental platforms for health |
| Third-Tier Empowerment | Local bodies need legal space and funding to act effectively |
| Digital & Data Sovereignty | State-friendly digital health ecosystems respecting privacy |
Policy Recommendations
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Legislative Reform: Amend or replace Disaster Management Act provisions to ensure mandatory state consultations and better-defined jurisdictions.
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Health Emergency Council: Establish an institutional body—similar to GST Council—to facilitate policy coordination, resource sharing, and health protocol harmonization.
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Fiscal Devolution: Commit to health blocks in future Finance Commissions to ensure reliable and predictable funding flows to states and local governments.
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State-Led Digital Frameworks: Encourage state-led health data governance models aligned with central standards, supplemented with robust privacy protections.
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Strengthen Local Capacities: Institutionalize health as a formal part of PRIs and ULB functions with defined powers, responsibilities, and fiscal capacity.
Conclusion
The COVID-19 crisis unmasked the fault lines and strengths within India’s health federalism—with the Centre-led initial response necessary for scale, but state and local governance critical for effectiveness.
Going forward, India must reconcile its need for national coherence in public health with the realities of state autonomy, fiscal decentralization, and local empowerment. Building a resilient health federalism requires both structural institutions and clear constitutional guardrails, ensuring India can tackle future crises without compromising democratic norms or federal balance.