'Federal Government' is a set of government in which powers are distributed between a central authority and various constitutional units.
The key features of a federal government are as follows:
(i) Two or more levels of Government: In a federal government there are two or more levels of government at the State, provincial and local levels. As an exception in India we have third level of government i.e., at the local level.
(ii) Constitutional Status : Federalism provides constitutional guarantees for the existence and authority of each tier of government. The jurisdiction of the respective levels or tiers of government are specified in the constitution.
(iii) Independent Judiciary: Independent judiciary is the essence of federal government. Here courts have the power to interpret the constitution and the powers of the different levels of government. The highest court acts as an umpire if a dispute arises between different levels of government in the exercise of their respective powers.
(iv) Financial Autonomy : In order to ensure financial autonomy federalism provides specified sources of revenue for each level of government. Every level is free in its own way to impose taxes and raise funds through remunerative enterprises.
In this way a 'federal government' has dual objectives i.e., to safeguard and to promote unity of the country by way of mutual trust and agreement to live together.
(v) Distribution of Powers: In federalism different tiers of government govern the same citizens, but each tier has its own jurisdiction in specific matters of legislation, taxation and administration.