In a vast country like India, the spirit of cooperative federalism should guide the relations between the Centre and the states on the one hand, among different states and between the states and the Panchayati Raj Institutions (PRIs) and the Urban Local Bodies (ULBs) on the other. 

Federalism, K.C. Wheare notes, traditionally signifies the independence of the Union and State governments of a country, in their own spheres. However, there was nothing traditional about the circumstances in which India’s Constituent Assembly met. Accordingly, even when its members carefully studied the Constitutions of other great federations like the US, Canada, Australia and Switzerland, they adopted a ‘pick and choose’ policy to formulate a system suited uniquely to the Republic’s need. As a result, India’s Constituent Assembly became the first-ever constituent body in the world to embrace what A.H. Birch and others have referred to as ‘cooperative federalism’ — essentially defined by administrative cooperation between the Centre and the states, and a partial dependence of the states upon payments from the Centre.  

The essence of cooperative federalism is that the Centre and the state governments should be guided by the broader national concerns of using the available resources for the benefit of people.

Cooperative federalism encourages the government at different levels to take advantage of a large national market, diverse and rich natural resources and the potential of human capabilities in all parts of the country and from all sections of the society for building a prosperous nation.

Cooperative federalism makes it possible to raise all the available resources by the Government at different levels in a coordinated way and channel them for use for the common good of the people. This requires a harmonious relationship and cooperative spirit between the Centre and the states and among the states themselves. While a healthy competition among the states for evolving efficient and socially desirable policies and programmes is welcome, any competition which nullifies each other’s advantages in development and erodes the resource base of the states should be avoided.

The Constitution of India had envisaged a ‘creative balance’ between the need for an effective Centre and effectively – empowered states. The Constitution has worked as a functioning mechanism, not just for resolving inter-governmental disputes, but in maintaining a constitutional balance between the tiers of government. 

A country the size of a continent, this “Union of States” has 28 States and 8 ‘union territories’, as units of federation. At the time of Independence, it was realized that federalism could be a good device for solving the problems based on ethnicity, language and others if these ethnicities are territorially identifiable.

Constitutional mechanisms providing for cooperative federalism

Delegation of Executive Functions

Article 258(1) holds that the President may, with the consent of the Government of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends.

According to Article 258A, the Governor of a State may, with the consent of the Government of India, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the State extends.

Full Faith and Credit Clause: Since the jurisdiction of each state is confined to its own territory [Articles 162, 245(1)], the Acts and records of one state might, have been refused to be recognised in another state, without a provision to compel such recognition. 

The Constitution, therefore, provides that-

1. Full faith and credit shall be given throughout the territory of India to public Acts, records and judicial proceedings of the Union and of every State. [Article 261 (2)].

2. Final judgments or orders delivered or passed by civil courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law. [Article 261(3)].

Adjudicating Mechanism: Under Article 262, the Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter-state river or river valley and also provide for the exclusion of the jurisdiction of all Courts, including the Supreme Court, to entertain such disputes.

In exercise of this power, Parliament has enacted the Inter-State Water Disputes Act, 1956, providing for the constitution of an ad hoc Tribunal for the adjudication of any dispute arising between two or more states with regard to inter-state river or river valley.

Consultative Mechanism: Article 263 says that the President may appoint an Inter-state council if public interest should be served in this regard. The functions of Inter-State Council are to enquire into and advise upon the disputes which may have arisen between the states themselves or between the centre and the state. Investigating and discussing subjects in which some or all the states or the union or one or more states have a common interest.

The judiciary provides rigid procedure of resolving disputes and the decisions are binding on the parties. Whereas the Inter-State Council provides a flexible system of resolving disputes more in the form of discussions and consensus.

The Centre and the other states can extend their good offices for resolving their disputes. The consultative mechanism also investigates and makes recommendations but the courts don’t do this. The Inter-State Council (ISC) was established under Article 263 of the Constitution of India through a Presidential Order dated May 28, 1990. The Council is a recommendatory body for making recommendations upon any such subject and in particular, recommendations for the better coordination of policy and action with respect to that subject and deliberating upon such other matters of general interest to the states as may be referred by the Chairman of the Council.

The Council comprises of the Prime Minister as Chairperson and Chief Ministers of all the States, Chief Ministers of Union territories having Legislative Assemblies, Administrators of Union territories not having Legislative Assemblies, Governors of States under President’s rule, six Ministers of Cabinet rank in the Union Council of Ministers nominated by the Prime Minister as Members and four Ministers of Cabinet rank in the Union Council of Ministers nominated by the Prime Minister as permanent invitees.

The Sarkaria Commission in its report had recommended the change of name of Inter-State Council to Inter-Governmental Council.

Apart from this, in exercise of this power, the President has already constituted the Central Council of Health, the Central Council of Local Self Government, the Central Council of Indian Medicine and Central Council of Medicine.

Balancing Mechanism: An important feature of India’s fiscal federalism is revenue sharing between the Union and the states. There is a clear vertical imbalance between 

(1) the powers of taxation assigned to the Union and the states and 

(2) the social and economic responsibilities assigned to the states. 

That is, the states’ responsibilities exceed their own source revenues. But, the Finance Commission provides mechanisms for periodically correcting this imbalance and for allowing the states to better discharge their responsibilities. 

These forums cater to the grievances of the states, which they redress to the extent possible. The Constitution provides that the distribution between the Union and the states of the net proceeds of taxes that are to be divided between them, and the allocation between states of the respective shares of such proceeds, shall be done on the recommendations of a Finance Commission that is appointed by the president every five years. 

The Commission also recommends the principles that should govern grants-in-aid to the states. The grants are both a means to assist development schemes in states lacking adequate financial resources and an instrument to exercise control and coordination over the states’ welfare schemes.

Agencies working outside the Constitution

Zonal Councils

The zonal councils were constituted on the recommendation of the State Reorganization Commission of 1956. Five Zonal Councils- were constituted in 1956. These were- Northern, Southern, Eastern, Western and Central. In 1971, the North –East Zonal council act established the 6th Zonal council i.e., the North-East Zonal council.

These Zonal Councils owe their origin to an Act of Parliament. The creation of the Zonal Councils was a logical outcome.

The Zonal Councils are high level advisory bodies chaired by the Union Home Minister and the members are the State Chief Ministers and two Ministers nominated by the respective member States. These Zonal Councils have been set up with the aim to provide a common meeting ground in each zone for ensuring resolution of inter-State problems, fostering balanced regional development and building harmonious Centre-State relations.

The Zonal Council Secretariat interacts with State Governments, Central Ministries and institutions like the Planning Commission to explore issues of relevance for deliberation of the Zonal Councils. However, it is open to the enlightened citizens to identify such issues and bring them to the notice of the Zonal Council Secretariat.

The Zonal Councils, since their inception and have contributed significantly in bringing about socio-economic advancement in different parts of the country. Apart from specific issues relating to States/ Union territories of the Zones, issues of national importance like Internal Security, Right to Information Act, National Rural Employment Guarantee Act, trafficking in women and children, coastal security, etc. have been discussed and useful recommendations made. Recommendations of the Zonal Councils have facilitated significant changes at the ground level.

Universities Grants Commission

The UGC Act, 1956 created UGC as an agency of cooperative federation. Its functions are as follows:

(i) To take all necessary steps for the promotion and coordination of university education and for the determination and maintenance of the standard of teaching examinations and researches in Indian Universities.

(ii) To investigate into the financial needs of the Indian Universities and allocate funds to them.

NITI Aayog

NITI Aayog has been constituted to actualize the important goal of cooperative federalism and to enable good governance in India to build a strong nation state.

NITI Aayog performs following functions which help in achieving cooperative federalism:

·       The institution has to provide governments at the central and state levels with relevant strategic and technical advice

·       Dissemination of best practices from within the country as well as from other nations

·       The infusion of new policy ideas and specific issue-based support

·       To respond to the changing and more integrated world that India is part of

·       Ensure that the economically vibrant middle-class remains engaged, and its potential is fully realized

·       Incorporate the significant geo-economic and geo-political strength of the Non-Resident Indian Community.

·       Use technology to reduce opacity and potential for misadventures in governance

·       Ensure that India is an active player in the debates and deliberations on the global commons.

NITI Aayog will function in close cooperation, consultation and coordination with the ministries of the central government and state governments. It will provide critical directional and strategic input to the development process, focusing on deliverables and outcomes. It is the constant endeavor of NITI Aayog to evolve a shared vision of national priorities, sectors, and strategies with the active involvement of States, wherein States are equal stakeholders in the planning process as well. 

NITI Aayog has also established models and programmes for development of infrastructure and to reignite and establish Private Public Partnership, such as the Centre-State partnership model: Development Support Services to States (DSSS); and the Sustainable Action For Transforming Human Capital (SATH) programme which is designed to help States improve their social sector indicators by providing them technical support.

Further, with the aim of correcting regional developmental imbalance, NITI Aayog has taken special steps for regions needing special attention and support, like the North Eastern States, Island States and hilly Himalayan States by constituting special forums to identify their specific constraints, formulating special policies to ensure sustainable development takes place in these regions while also protecting their abundant natural resources.

Thus, the Indian Constitution would seem to create a “cooperative union” of states rather than a dual polity. The actual working of cooperative federalism in India has entailed the Union’s exercising its influence rather than its constitutional authority. A redistribution of powers through decentralization and the devolution of authority from the Union to the states and from the states to the Panchayats and municipalities are serving to facilitate the attainment of the objectives of the Constitution: unity, social justice, and democracy. 

Any federal system is a device of shared-governance, and the Constitution of India envisages a ‘creative balance’ between the need for an effective Union and effectively – empowered states. The debate is today less about division of powers and more about recognition of roles and responsibilities.