The role of data science in changing the shape of Indian federalism


The contours of data science have expanded rapidly in recent times to include novel fields. Data science in the present time is no longer limited to technical fields alone. It has broadband its scope and influenced issues like policy making. Federalism is one issue that has been addressed by data science. In fact, it would be better to say that the broad range of issues within the domain of federalism have been influenced by data science.


In the present times, data science is continuously moving towards interdisciplinarity. This means that data science is influencing a wide range of fields and applications. Recently, there has been a lot of impetus on the application of data science in the domain of policy making. Both the national and the state governments in India have hired data scientists so that various issues related to federalism can be addressed. In this article, we first analyze the various issues with federalism. After this, we explore the solutions in Indian federalism with the help of data science and data analytics. We also examine how data science courses in India with placement can produce data analysts and help in resolving outstanding issues within other domains.

Issues in Indian federalism

The issues in Indian federalism can be discussed at the social level, political level, economic level and institutional level. Although a broad range of issues fall within the ambit of Indian federalism, we limit our discussion to those issues where data science finds prominent application.

At the social level, the most prominent issue is the issue of good governance. Good governance involves parameters like poverty alleviation, socio-economic development and community participation. All these issues require data as well as its analytics at the primary level itself.

At the economic level, the issue of tax collection looms large at the central and state level. The finance commission proposes the distribution of revenues between the centre and the states. It also proposes measures to augment the consolidated fund of States. The various criteria adopted by the finance commission to distribute funds require data inputs in the form of population levels, forest cover, gross state domestic product and financial performance. It also takes the area of the state into consideration. The goods and services tax is another issue in Indian federalism.

At the political level, the issues are much complex and involve federalism at the administrative level. At the institutional level, issues related to interstate disputes and inter water disputes under the article 263 and 262 need data inputs. The role of data science in resolving such issues is discussed in the next section.

The role of data science in resolving federal issues

The role of data science at the social level is related to data mining and analytics with respect to good governance. An example of this can be found in the form of aspirational district program of Niti Aayog. The Aayog has identified 115 aspirational districts by collecting data with respect to poverty levels, educational advances, health infrastructure and the like. It needs to be noted that aspirational districts have been identified on the basis of above mentioned parameters but the final list was possible only due to data analytics and insights.

At the economic level, we earlier identified issues with respect to tax collection and goods and services tax. Data science provides inputs in the form of a central repository of data that keeps records of the tax collection. The income tax department uses advanced data analytics in cases of ITR filing and approval. Data analysis is also used to check discrepancies with respect to income tax and disproportionate income. Other cases like tax avoidance and tax evasion can also be checked with the application of data science. There are other instances like round tripping, base erosion and profit shifting (BEPS) and exploitation of lacuna in bilateral treaties and tax havens. While the traditional methods are inadequate to track such complex matters, data science and data analytics provide the framework through which such issues can be resolved.

At the institutional level, two major issues have been highlighted in the form of inter-state council and river water disputes tribunal.

A case study linking data and federalism

A case study in this regard is the cauvery river water tribunal that made it mandatory to collect data with respect to river water sharing between the states of Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, and Puducherry. Consequently, the only way to collect, process and analyze this data was through the use of data analytics. In this way, the decades old dispute of river water sharing achieved significant breakthroughs with the inputs from data science.

In addition to this, the issues related to the goods and services tax were complicated and became a bone of contention between the centre and the states. This not only strained the centre state relations but also put federalism on the back seat. In one of its meetings, the GST council highlighted the need of data analytics and data visualisation techniques to overcome the long standing issues. As a result, goods and services tax network or GSTN was conceived as an online platform with heavy reliance on data science and Data Analytics. In this way, data science served an effective purpose in consolidating the overall structure of Indian federalism by resolving various issues in an amicable way.

Data science courses to take the lead in future

Federalism is just one of the important issues in policy making where data science has found expression. In times to come, the scope and prospects of data science would extend to other untouched domains as well. This calls for a renewed thrust and impetus on data science courses so that they take the lead in enabling us to solve other issues and challenges. These issues and challenges, once overcome, would culminate into good governance and ethical governance. This would also pave the way for evidence based policy making by harnessing the power of advanced analytics.


Germany has already taken major strides to strengthen its federalism with the help of data science. The ball is now in the Indian court to take a major leap forward.

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