Constitution is the legal document in which various governing principles are established functions and procedural aspects of the government are specified under which different organs of the government are specified under which different organs of the government work .Constitution is the supreme law of the land which is ascertained by Kelsen as the " Grund Norm" in his Pure theory of law.
American Constitution is the pioneer of all the federal constitutions followed by the Canadian and Australian constitution respectively. It may be traced that the Federal principal was adopted in the Government of India Act 1935 and the same was reinserted in the draft constitution by the Constitution Assembly Dr. B. R. Amedkar feels it convenient to describe Indian constitution as both Federal and Unitary. He opines that it works as a federal constitution under the normal condition and as Unitary during the war or crisis.
The principle may be understood as 'the method of dividing powers , so that the general and regional governments are each within a sphere of co-ordinate and independent; and not sub-ordinate to each other-  Professor Wheare . The existence of co-ordinate authorities independent of each other is the gift of the federal principal where as the supreme sovereign power is vested with the only central organ which ultimately controls the state in a unitary form of government. Federalism is not static but a dynamic concept. It is always in the process of evolution and constant adjustments. It is also recognized that federalism is one of the basic features of the Constitution in Kesavananda Bharathi's case.
- There must be a written and rigid Constitution. Constitution being the supreme law of the land, it must be rigid so as to uphold its supremacy.
- Written constitution is essential if federal government is to work well.
- Distribution of powers, between the central Government and State governments is the most essential and ordained feature of a federal constitution. The distribution must be such that both the governments should exist in a co ordinate and independent in their own spheres.
- Independent and impartial judiciary is to uphold the supremacy of the constitution by interpreting the various provisions and settling the disputes between the laws made by the governments and the Constitution.
This Court in paras 71 to 73 of the judgment in Kuldip Nayar & Ors. v. Union of India & Ors., (2006) 7 SCC 1 held as under:
"71 But then, India is not a federal State in the traditional sense of the term. There can be no doubt as to the fact, and this is of utmost significance for purposes at hand, that in the context of India, the principle of federalism is not territory related. This is evident from the fact that India is not a true federation formed by agreement between various States and territorially it is open to the Central Government under Article 3 of the Constitution, not only to change the boundaries, but even to extinguish a State (State of West Bengal v. Union of India  1 SCR 371) . Further, when it comes to exercising powers, they are weighed heavily in favour of the center, so much so that various descriptions have been used to describe India such as a pseudo-federation or quasi- federation in an amphibian form, etc."
"72 The Constitution provides for the bicameral legislature at the center. The House of the People is elected directly by the people. The Council of States is elected by the Members of the Legislative assemblies of the States. It is the electorate in every State who are in the best position to decide who will represent the interests of the State, whether as members of the lower house or the upper house."
"73 It is no part of Federal principle that the representatives of the States must belong to that State. There is no such principle discernible as an essential attribute of Federalism, even in the various examples of upper chamber in other countries."
34) In State of Karnataka v. Union of India and Anr. (1977) 4 SCC 608, in para 220 of the judgment, Untwalia, J. (for Singhal J., Jaswant Singh J. and himself) observed as under:
"Strictly speaking, our Constitution is not of a federal character where separate, independent and sovereign State could be said to have joined to form a nation as in the United States of America or as may be the position in some other countries of the world. It is because of that reason that sometimes it has been characterized as quasi-federal in nature.............."
This quasi-federal nature of the Constitution is also brought out by other decisions of this court. [See State of West Bengal v. Union of India  1 SCR 371; State of Rajasthan and Ors. v. Union of India  1 SCR 1; ITC Ltd. v. Agricultural Produce Market Committee  1 SCR 441; State of West Bengal v. Kesoram Industries Ltd.  266 ITR 721(SC)
In order to be called federal it is not necessary that a Constitution should adopt federal principle completely. It is enough if the federal principle is the pre-dominant principle in the constitution. The mere presence of Unitary features in a constitution which may make the Constitution 'quasi federal' in law, does not prevent the Constitution from being pre-dominantly federal in practice. ( H.M.Seervai). Professor Whear described India as neither Federal nor Unitary but 'Quasi Federal'.
Indian Constitution came into existence on 26th January 1950 adopting the federal principle pre dominant. The doctrine of pre dominance as ascertained by HM Seervai does not hold good as the degree of pre dominance is negligible compared to that of other Federal Constitutions. According to M.C Setalvad, " the constitution of India having been drawn in mid 20th Century presents a modified form of federation suitable to the special requirements of the Indian society."
Article 1 of the Constitution describes as a Union of States. Dr B.R. Ambedkar justifies it to be advantageous to describe India to be a union of States, though it is federal in nature. Accordingly, during the crisis it shall be Unitary in nature.
Prof. Alexandrowitz says that India is supposed to have quasi federation mainly because of the articles 3, 249, 352 to 360 and 371. It may be aptly be stated that he supports Lord Ambedkar's view.
Power to alter the boundaries:
Article 3 empowers the Parliament to alter the boundaries of states even without the consent of the states which dilutes the federal principle. State of West Bengal in its memorandum submitted to the President of India compares article 3 to be a damocle sword hanging over the heads of the states. HM Seervai defends the power of the Parliament to alter the boundaries of the states that " by extra constitutional agitations the states have forced parliament to alter the boundaries of States" In practice, therefore the federal principle has not been violated." But, Seervai agrees that the power vested in the Parliament was a serious departure from the federal principle. History reveals that there has been no answer or rationale basis for such a serious departure.
Distribution of powers:
Distribution of powers is one of the pre requisites of a federation of states. The object for which federal state is formed involves a division of authority between the national government and the separate states- Prof. A.V.Dicey.
Parliament can legislate with respect to a matter under the State List
a) in the national interest(Art . 249) or
b) if a proclamation of emergency is in force (A250).
The provisions resolving inconsistency between central and state laws is also weighed in favour of the centre (A251 and 254)-AG Noorani.
Gwyer C.J. observed that the conferment of residuary power upon the centre has been done following the Canadian constitution. The U.S and the Australian constitutions which are the indisputably federal confer the residuary power on the states. The non congress opposition parties conferences [held in 1986-87] resolved to demand for the conferment of residuary power on the states as a measure to strengthen the federal principle.
- Under the present provisions of our Indian Constitution the States are entitled to a share of the centers revenues derived from only a few taxes principally income tax and excise duties ( @ 45% approximately)
- Finance Commission constituted under Article 352 as the balance wheel of the Indian Federal financial relationship
- Article 365 dilutes the Federal Principle by imposing President's Rule in the State which fails to comply with or direction of the Center. Seervai defends the power as it is open for judicial review. But it may be noted that the imposition of President's Rule effects the independence of the States. However, practically speaking when once a democratically constituted government is de throned through such imposition of President's Rule it is not only un- democratic but it costs burden on the exchequer of the State for conducting re-elections. The judicial review is a time consuming process and sometimes, by the time the decision is given the tenure of office of the government may expire. Therefore, conferment of such blanket power on the Center is undesirable as its effects the democratic process and dilutes the Federal Principle.
- President is competent proclaim Emergency in any part or whole of the country under Article 352 if he is satisfied that grave emergency exists. The 44th Amendment to the Constitution replaced the words," internal disturbance" and inserted " armed rebellion". The proclamation of Emergency in 1975 by the unilateral decision of the then Prime Minister of India Mrs Indira Gandhi, led to the Amendment of the Constitution and the power has been much mis used during the emergency.
- In Rajasthan v Union of India the Supreme Court has re iterated its dictum in West Bengal v. Union that the extent of Federalism is largely watered down by the needs of progress and development of the country.
- State of West Bengal submitted a memorandum suggesting certain changes in our Constitution to strengthen the Federal principle. Parliament's power to alter the boundaries of a state under Article 3 should be subject to the State's approval. Residuary power under Article 248 of the Constitution should be conferred upon the States. Deletion of Article 249 and Article 356 to 360 would likely to strengthen the federal Principle.
- It is unfortunate to note that there has not been proper utilization of Article 263 of the Constitution.
This is high time to re constitute the Inter State Council as an autonomous, independent and high powered. It must be entrusted with the responsibility to deal with all the issues between the center and the states. Finance Commission and Planning commission should be made independent autonomous authorities and the appointments shall be made in consultation with the States. Adequate autonomy must be facilitated to the States through the conferment of power on the States and by suitably amending Articles 3, 249 and 346 respectively. Conferment of residuary power on the States is also desirable. Governors shall be appointed by the Inter state council. Disputes if any between the Center and the States shall be expeditiously decided through constitution of Special Constitutional Benches.
-Mohan Rao B. former Principal, Rajiv Gandhi Institute of Law, Kakinada
source : http://www.lawyersclubindia.com/articles/Federal-Principle-in-the-Indian-Constitution-a-perspective--3278.asp