The Federal System thus has Dual Objectives
- Safeguard and promote unity of the country
- Accommodate regional diversity.
Both the aspects are therefore crucial for the institutions and practice of federalism. Some rules of power sharing, should be agreed by the Governments at different levels.
From one federation to another the exact balance of power between the central and the state government varies. This balance depends mainly on the historical context in which the federation was formed. There are two kinds of routes through which federations have been formed.
- The first way :- involves independent states coming together on their own to form a bigger unit, so that by pooling sovereignity and retaining identity they can increase their security. The constituent states usually have equal power and are stronger than the federal government, in this category of federations.
- The second way :- is where a large country decides to divide its power between the constituent states and the national government. In this second category, the central government tends to be more powerful than the states. Different constituent units of the federation have unequal powers very often and a few units are granted special powers