Question

‘India is a federal economy.’ Explain.

Answer 1

1. The Indian Constitution establishes a federal system, meaning that economic activities and institutions function at both the Central and State levels.
2. Powers related to economic regulation are clearly distributed between the Centre and the States.
3. For instance, sectors such as Railways, Posts and Telegraphs, and atomic power plants are managed by the Central government.
4. Meanwhile, areas such as land, irrigation, electricity, and road transport come under the jurisdiction of State governments.
5. Despite this division, the Centre retains overriding control and authority in the economic framework.