Abstract

The federal system is largely a product of the industrial revolution. We can assume that the development of the modern market economy and federalism are inextricably linked because these two systems or organising principles one dealing with the regulation of economic markets or exchanges, the other with the regulation of political markets or political interaction have certain advantages over one another. Even though we have lived in three different federal systems the United States, Switzerland, and India we are more acquainted with the federal system in India, thus most of our observations today will centre on some of its most important features. India’s federal system is more than 75 years old, while the US, Switzerland, and Canada have been around for more than 200 years. India’s federal system has done a fantastic job of advancing democracy, preserving national unity, and advancing the country’s economy. Federalism, as a form of governance, has undergone significant transformations in the 21st century due to various global, national, and local dynamics. This research paper explores the contemporary landscape of federalism, examining its challenges, the evolving dynamics shaping its operation, and the adaptations it undergoes to address modern societal needs. Drawing on interdisciplinary perspectives, including political science, law, economics, and sociology, this article provides a comprehensive analysis of federal systems worldwide. It highlights key themes such as the impact of globalization, technological advancements, demographic shifts, environmental concerns, and the rise of populism on federal structures. Moreover, it investigates how federal systems navigate decentralization, autonomy, intergovernmental relations, and the distribution of powers in an increasingly interconnected world. By synthesizing theoretical frameworks and empirical evidence, this article offers insights into the resilience, flexibility, and viability of federalism as a governance model in the 21st century.

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