A federal government is a system of government where there is a division of power between the union government at the center and the local regional governments operating under it. The United States of America is an example of a perfect federation with an equal division of powers between the center and the state.
The Indian federation on the other hand is unique in its mode of operation. It is similar in many respects to the Canadian federal structure. Article 1 of our constitution says that “India, that is Bharat, shall be a Union of states.” Dr. B.R. Ambedkar the chairman of the Drafting Committee had stated that although the Indian Constitution is federal in structure the word “union” has been used to indicate that federalism in India is not the result of an agreement among the units and the constituent units in the Indian Federation have no right to secede from it. In his opinion, such an arrangement made the federation a permanent and unbreakable union. The constitutional system of India is federal in structure with striking unitary features.
The Indian federation has undergone significant changes since its inception. In contemporary times the Indian federation has shown cooperative, competitive and confrontational tendencies which have altered the nature of the Indian federation greatly.
Cooperative Federalism: This refers to a horizontal relationship between the states and the center. The states cooperate with each other and the center to achieve goals of growth, development of the states and nation. The concept of cooperative federalism set forth the view that the state and national governments are partners in exercising governmental authority. The Indian government’s efforts towards building cooperative federalism with the states can be witnessed in the recent steps that have been undertaken.
- The recent development on the introduction of the Goods and Service Tax(GST), which is the biggest tax reform is the result of a tandem between the states, the GST council also empowers the states to contribute to the national fiscal policy thereby working hand in hand with the center in fulfilling the goal of ‘one country-one tax system’.
- The finance ministry also introduced a model of Centre-State Investment Agreement in the Union Budget of 2016-17 which was to be signed between the center and the states; the states signing the treaty will be benefitted with attractive foreign investments, thereby enhancing their chances of development.
- The 14th Finance Commission had also increased the State’s share in the net proceeds of the Union tax revenues to 42% from the earlier 32%. This was the largest ever increase in the percentage of devolution between the center and states.
- One of the most important directives of the NITI AAYOG is also to work on the development of cooperative federalism in India.
The cooperative federalism has empowered the states given them more power and autonomy to work and focus on their development in cooperation with the center.
Competitive Federalism: In Competitive federalism, the central and the state governments share a vertical relationship with each other while the state governments have a horizontal relationship between themselves. The states compete with each other to attract funds and investments for developmental activities.
- The SDG India Index formulated by the NITI Aayog is the primary tool to monitor the progress of SDGs in the country and also foster competition among the states and the Union Territories.
- Ease of Doing Business Ranking also encourages a sense of competition among the states for funds from the central government.
- The NITI Aayog has also launched the raking of 115 districts for the Aspirational District Programme (ADP) thereby enhancing competition among the states for funds and fulfilling the larger goal of developing India’s most underdeveloped districts.
- The Swachh Bharat Ranking, “Vibrant Gujarat”, “Resurgent Rajasthan” are some of the other schemes launched by the Government of India to encourage competitive federalism.
Competitive federalism fosters a spirit of competition among the states, whereby the states compete with each other and focus their energies to the developmental activities in the respective states.
Confrontational Federalism: This is the result of the central government infringing upon the powers of the state government.
- The union government also transgresses the authority of the state government by making laws on subjects mentioned in the State list, for instance the three farm laws passed by the Union government while led to country wide protests.
- The Governors act as an agent of the center in the states, they reserve bills for the consideration of the President thereby intervening in the administration of the state, whenever the views of the state are contrary to that of the center.
- The unilateral revocation of Article 370, thereby taking away the special status conferred on Jammu and Kashmir.
The confrontational federalism is an evident tool in the hands of the center by which it exercises an effective check on the administration of the state and reinforces its policies on the state whenever the state acts contrary to the views the state.
The Indian Federation is a unique arrangement of states; its evolution over the years has revealed the ‘Quasi-Federal’ nature of the Indian federation. In 2017, NITI Aayog emphasized competitive, cooperative federalism; they believed that this would redefine the relationship between the center and the state. Cooperative and competitive federalism are not mutually exclusive, their basic motive is the development of the nation. Confrontational federalism on the other hand continues to re-impose the unitary bias in the working of the federation. While cooperative and competitive federalism continue to empower the Indian states and inculcate developmental tendencies in them, Confrontational federalism on the other hand infringes the autonomy of the states thereby maintaining a check against their arbitration. All the three together balance the working of the federation and help the Indian federation to adapt better to the changing socio-economic and political environment.
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