Cooperative Federalism: Myth or Reality | HPSC Preparation: All subjects - HPSC (Haryana) PDF Download

Politics

India follows a quasi-federal model of federalism, which has features of both - a federation and a unitary nation. It is the Indian Constitution that creates a federal structure by calling it a‘ union of states’. The federal form of government is divided between a central authority and federating political entities (states). Cooperative federalism shows the relationship between the centre and the states which have joined hands in solving mutual issues with the aid and advice of each other (centre of states/ states of centre). Because of such cooperation and collaboration, both centre and state governments at different levels work toward achieving greater growth, equitable development, and social welfare of the citizens.

Centre-State Relationship

In cooperative federalism, a horizontal relationship between the union and the states and shows neither is dominant over the other. To solidify these various concepts like Inter-state council, zonal council, GST Council, 7th schedule (3 lists), etc. have been incorporated in the Indian constitution. However, while experts believe that “true” cooperative federalism is the way ahead, they emphasise the need for the Centre to include states in the decision-making.
Indian federalism is very mature; we have seen the evolution of a Cooperative federal structure in India from a centralised administrative structure. As per various reports in 1947 and 1977, there were 44 instances when the power to impose the president’s rule was exercised, and between 1977-1996, such power was exercised almost 59 times. Indira Gandhi’s government is infamous for resorting to Emergency over 50 times in 14 years of her tenure as the prime minister. And from 1991 to 2016, there have been 32 instances of the exercise of this power compared to 92 times in the previous year.

Centre’s Leverage Over States

In S.R. Bommai vs. Union of India (1994), Supreme Court laid down few restrictions on the exercise of the power of the President's Rule; these restrictions were not complete restrictions but just gentle breaks on the exercise of this power. But the centre still holds superior powers of legislation, which includes residuary powers and legislative precedence.
Thus, in the past few years, Cooperative federalism has increased where the center's relationship with states’ and states with states has improved. However, still, some area of contention exists in the form of powers of taxation where the centre has the upper hand due to express provisions in the constitution.
In the light of recent tax reform called GST (Goods and services tax), states’ have foregone various taxation powers over taxes like entry tax, luxury tax, octroi, etc. But states still possess powers to levy taxes through panchayats and municipalities to supplement the income of local bodies so that they can invest in improving people’s conditions at the ground level. This shows an anomaly where a transaction is being taxed under GST Laws and a local state-specific law simultaneously.
The Finance Commission's recommendations are placed before Parliament, and States have no say in their deliberation. Also, no provision exists for an aggrieved State to challenge its report on certain grounds.

Economic Disparity Between States

A regional disparity exists where few states are performing well in terms of their revenue generation capability, their budgetary base expanding every year. But due to lopsided development in various states where the western region of India in the last few decades of the 19th century witnessed massive industrialization, which was extended to the southern region, thus having greater financial clout vis-a-vis other Indian states.
Many states have a feeling of alienation which becomes the reason why states want a separate State sometimes. Thus, the need of the hour is to have a balanced and engendered model of development where at one level states cooperate, and on the other level they compete. The centre becomes the facilitator of their growth while keeping major focus on those states which require greater assistance. Proper strategies and pathways have to be designed beforehand as to gain growth right strategies are required to utilise resources available in a different part of the country, thus industries will be primary propeller by sustainable utilisation of countries resources to ensure balanced regional development.

Mechanisms to Settle Centre-State & Inter-State Disputes

We also see an absence of dispute solving mechanism as we do not possess any mechanism to solve the disputes between the centre and State or between 2 states. Though Article 262 provides the authority to the centre to take steps to solve the disputes, the central government never took such initiative in the past few years. That becomes the major reason why so many disputes are still pending in the Supreme Court, especially river water disputes.
To resolve such a contentious issue separate institutional structure must be created to solve the disputes between centre and states or between states inter se. Also, special machinery should be developed for the integral development of the whole country. Permanent Inter-state river water tribunal can be a good step as it shall protect states’ from river disputes stretching for years and waiting for centre’s tedious approval for initiating the dispute redressal mechanism Niti Aayog as a forum and various institutions under it is also an excellent step which government has brought to promote Cooperative federalism where states even with different parties having different political ideologies can come and keep their concern on the platform for deliberation, thus enhancing cooperation.
State governments also in the past few years have taken the responsibility in bringing investments in their states by holding state-level trade summits like Vibrant Gujarat, Bengal means business, etc. where investors participated in the summit and states rolled the red carpet for them by the introduction of cheaper and continuous availability of inputs like electricity and water. Land to be provided at concessional rates to the business houses etc. Also, the GST council where states and centre both are members, its mechanism to solve the disputes which arise will be a true test of cooperative federalism.

Challenges

It’s apparent that in the past few years, India has moved towards the path of achieving a Cooperative federal structure in the world. Still, all the stakeholders should take the necessary steps also to achieve such structure in spirit. A mechanism that promotes Cooperative federalism and increases competition between states for mutual benefit requires regular addressing by the stakeholders to deal with challenges. The centre should cooperate with states to ensure necessary autonomy existing in the policy-making and allocation of necessary funds that they can spend based on their own incumbent priorities.
Cooperative federalism and competitive federalism are not two mutually exclusive concepts but are two sides of the same coin. The cooperation forms the foundation on which competition can be initiated; thus, a balance between Cooperative and competitive federalism should exist. States do not just seek parity with each other, but states also have sought parity with the centre as suggested and recommended in Sarkaria and Punchhi commission reports. Central government support would be needed by few states to participate in competitive federalism where strong states make a strong nation. To realise this vision, “Team India” should work together in India’s development.