To understand what is the importance of federalism and why it is needed, it is necessary to know a little about what federalism actually is.

In simple words, the division of political powers between different states or territories under a central or federal system can be called federalism.  For example, in India there is a division of powers between the central and state governments.

Federalism exists in different ways in the world, most of the countries of the world advocate giving autonomous powers to their subordinate states or territories, but if seen, very few have given it in true sense.

The constitutions of Germany and the United States provide that all powers not specifically granted to the federal government are retained by the states.  The constitutions of some countries, such as Canada and India, state that powers not explicitly granted to provincial governments are retained by the federal government.

This is where all the trouble is, that is, the states have limited powers and the Center has immense powers, from here the system starts to deteriorate.

Federalism in Brazil has been made so extensive that in addition to all states, municipalities also have autonomous legislation and powers.  This federalism has kept Brazil alive even today, which has been suffering from inflation for decades, especially where the mafia-controlled municipalities are in a better position.  This is my own observed condition.

A diverse country like India needs to establish federalism with more powers at the lower level.