The book takes its name from a little-known episode in the history of Indian federalism. A statement of defiance, "Federalism Without a Centre", was issued by a group of Chief Ministers and regional leaders who met in Hyderabad in 1996. The slogan indicates the paradigm shift in federal relations in India. The book explores the new challenges posed by India's federal system with the advent of economic liberalization.

One of the outgrowths of the transformation of the party system has been the drive to re-examine federal relations. The book states, however, that it is economic liberalization that has permanently altered the federal calculus in India. It shows that states do not necessarily need to rely exclusively on the central government to control their individual economic policy. The book is the very first attempt of its kind to analyze the effect of economic liberalization on India's federal system and it provides up-to-date data on foreign direct investment and portfolio equity investment. In conclusion, it provides a unique comparison with China in showing that while India had great difficulties in implementing first generation economic reforms, it may have the upper hand in the implementation of second generation reforms, particularly privatization.