70^th BPSC Mains

Approach Briefly introduce your answer by defining the term cooperative federalism. Discuss the various issues between the Centre and the State. Suggest some important measures to strengthen cooperative federalism in India. Conclude suitably.

Introduction

Cooperative federalism signifies a collaborative partnership between the Centre and States, ensuring governance through mutual cooperation. Granville Austin termed Indian federalism as "cooperative federalism", emphasizing a strong Centre without weakening states. However, despite this ideal, various challenges hinder effective Centre-State relations, requiring urgent reforms.

Body

Challenges in Centre-State Relations

• Ineffectiveness of the Inter-State Council (ISC)
  • Article 263 provides for an Inter-State Council (ISC) for Centre-State consultation, but it has failed to resolve major disputes, like inter-state water conflicts.
• Over-Centralization of Power
  • India’s quasi-federal structure gives more authority and financial control to the Centre.
  • Residuary powers and a greater number of subjects under the Union List weaken state participation.
• Fiscal Imbalance and Taxation Issues
  • Under the GST regime, states have limited taxation autonomy and depend on the Centre for majority of their revenue.
  • States can tax petrol, diesel, and alcohol, but major revenue sources are under central control.
• Under-Representation of States in the Finance Commission
  • The Finance Commission's recommendations are presented to Parliament, but states lack direct representation.
  • No mechanism exists for states to challenge or enforce FC recommendations, affecting fiscal federalism.
• Misuse of Presidential Rule (Article 356)
  • The Centre can impose President’s Rule in a state, often leading to political misuse.
  • Between 1947 and 1977, it was invoked 44 times, primarily to destabilize opposition-led governments.
  • The S.R. Bommai case (1994) restricted its misuse, but concerns remain.
• Trust Deficit Between the Centre and States
  • Delays in GST compensation and shrinking divisible tax pools have raised concerns over the Centre’s commitment to federalism.
  • States like Kerala challenged the Citizenship Amendment Act (CAA), 2019 under Article 131, highlighting tensions in Centre-State relations.

Measures to Strengthen Cooperative Federalism

• Strengthening the Inter-State Council (ISC)
  • Institutionalizing the ISC with more authority to discuss concurrent list subjects and state concerns.
• Enhancing Fiscal Autonomy
  • State representation in the Finance Commission and timely GST compensation to ensure financial stability.
  • Increasing untied funds for states, allowing flexibility in spending priorities.
• Decentralization of Power
  • Implementing the principle of subsidiarity, allowing local bodies to handle grassroots issues.
  • Reducing central interference in state subjects for efficient governance.
• Model Laws with State Flexibility
  • Encouraging model laws that states can adapt to local needs, ensuring diversity in governance.
• Strengthening State Participation in Policy-Making
  • Greater involvement of states in NITI Aayog and national policy discussions.

Conclusion

For true cooperative federalism, the Centre must involve states in decision-making while ensuring fiscal and administrative autonomy. Strengthening institutional mechanisms and decentralization will pave the way for a balanced federal structure and inclusive development.