Q16. The concept of cooperative federalism has been increasingly emphasized in recent years. Highlight the drawbacks in the existing structure and the extent to which cooperative federalism would answer the shortcomings.

“Cooperative federalism is the art of making the Centre and states partners in nation-building.”

- NITI Aayog

Cooperative federalism Centre and states collaborating rather than hierarchically interacting has been promoted via institutions like the GST Council, NITI Aayog, and mechanisms such as the Inter-State Council. Yet structural drawbacks persist that cooperative federalism must address.

Drawbacks in Existing Structure

• Overcentralization: Constitutional provisions (Union List, Emergency powers, Article 356) give Centre supremacy, limiting state autonomy.
• Fiscal Asymmetry: States are fiscally constrained dependence on central transfers, vertical imbalance, and limited own-tax buoyancy.
• Policy Imposition & Administrative Control: Centre often issues national schemes with conditionalities and central agencies executing policies, undermining local contexts.
• Lack of Effective Intergovernmental Mechanisms: Inter-State Council and zonal councils lack teeth; meetings are episodic without binding outcomes.
• Implementation Capacity & Coordination Gap: Divergent capacities lead to uneven policy outcomes across states.

How Cooperative Federalism Addresses These

• Institutional Platforms: Bodies like the GST Council demonstrate consensus-based decision making where states have voice reducing fiscal friction. The Council’s success indicates how shared governance can work.
• NITI Aayog’s Role: As a policy think tank and convener of Centre–state dialogues, NITI has encouraged performance-based federalism (SDG India Index, Aspirational Districts).
• Devolution and Fiscal Federalism: Recommendations of the 14th and 15th Finance Commissions enhanced devolution and performance grants, partially addressing fiscal asymmetry.
• Cooperative Implementation: Examples like PM-JAY (Ayushman Bharat) required state participation and tailored implementation aligning national goals with state execution.

Limitations of Cooperative Federalism

• Political Mistrust: When Centre and state are from rival parties, cooperative mechanisms are politicized.
• No Legal Bindingness: Many cooperative mechanisms are consensual and lack enforcement power.
• Capacity Constraints Persist: Cooperative frameworks do not instantly build administrative capacity in weaker states.

Haryana’s collaboration with Centre in schemes like PM Kisan and Jal Jeevan Mission shows cooperative implementation success: state customization improved water supply targets. The state’s active participation in the GST Council and benefits from devolution illustrate cooperative federalism’s gains.

Way Forward

• Strengthen institutionalized intergovernmental councils with regular agendas and monitoring.
• Enhance state fiscal autonomy through broadened tax bases and predictable transfers.
• Promote capacity building via federal matching funds and knowledge sharing.
• Embed cooperative dispute resolution mechanisms to depoliticize Centre–state disputes.

Cooperative federalism has potential to fix structural drawbacks if institutionalized beyond rhetoric through binding councils, fiscal fairness, and capacity building. When practiced sincerely (as in some Haryana–Centre collaborations), it can reconcile unity with diversity and improve governance outcomes.