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Federalism is a system of polity in which power is divided between Union and its constituent units i.e. states. In this system, the Central Government usually oversees the issues that are of importance for the entire country, whereas the government at the lower level looks after issues of local concern. The purpose of this Division of Power between the two tiers of government is twofold: i) Preventing concentration of power in the hand of one tier of government ii) Generating strength of the nation through the Union.
So what exactly are the characteristics of federalism?
i. There should be two levels of governments, with each having its own independent sphere of administrative and legislative competence.
ii. Each level of the government should have an independent tax base.
iii. A Written Constitution from which respective governments derive power.
iv. Existence of rigid constitution
v. An independent judiciary to adjudicate if conflict arises between the two tiers of government.