Federalism requires that state and local governments play a role in nearly every policy area. The federal system, also known as federalism, power is divided amongst three levels – union government, state government and local government. It will provide knowledge to the student about the basics of federalism in India with special mention to decentralisation. Under federalism, each level of government is independent and has its powers and responsibilities. The local government called the ‘Panchayati Raj’.