GS Paper 2 12.5 marks · 200w 14 min Medium
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.
Subtopic: Constitution & Polity · Federalism and Centre–State relations
How to structure your answer
Introduction: quasi-federal tilt → Drawbacks of the existing structure (356, Governors, fiscal imbalance, CSS rigidity) → Cooperative-federalism instruments: 14th FC, NITI Aayog, GST Council → Extent of the remedy and remaining gaps → Conclusion
Detailed model answer
231 words · target 200 words · 14 min
Context
Indian federalism is constitutionally tilted towards the Centre — a "quasi-federal" scheme. Cooperative federalism, in which Centre and States decide as partners, has been emphasised as the corrective.
Drawbacks in the existing structure
- Historical misuse of Article 356, checked only after S.R. Bommai (1994).
- Governors acting as agents of the Centre — partisan conduct and indefinite delays over assent to Bills under Article 200.
- Vertical fiscal imbalance: States incur roughly 60% of combined government expenditure but raise a far smaller share of revenue; growing cesses and surcharges stay outside the divisible pool.
- One-size-fits-all centrally sponsored schemes with rigid conditionalities.
- Central encroachment on Concurrent List subjects; a largely dormant Inter-State Council (Article 263).
How far cooperative federalism answers these
- The 14th Finance Commission raised untied tax devolution from 32% to 42%, expanding State fiscal autonomy.
- NITI Aayog (2015) replaced top-down plan allocations with a Governing Council of Chief Ministers and competitive-cooperative tools such as the Aspirational Districts Programme and performance indices.
- The GST Council (Article 279A) institutionalised shared Centre-State decision-making, functioning largely by consensus.
- Centrally sponsored schemes were rationalised after a sub-group of Chief Ministers reported in 2015.
Limits
NITI Aayog lacks financial powers; expanding cesses claw back the 42% gain; the GST compensation standoff (2020) and recurring friction over Governors reveal a persisting trust deficit — cooperation can shade into coercion.
Conclusion
Cooperative federalism answers the shortcomings only partly. It needs institutional guarantees: regular Inter-State Council meetings, Punchhi Commission norms for Governors and a wider, cess-free divisible pool.
What an examiner expects to see
- Structural drawbacks: Article 356 misuse, partisan Governors and Article 200 assent delays, vertical fiscal imbalance, cess/surcharge exclusion from the divisible pool, rigid CSS design, dormant Inter-State Council.
- The 14th Finance Commission's increase of untied devolution from 32% to 42% was the biggest fiscal-federalism gain.
- NITI Aayog's Governing Council and competitive-cooperative instruments replaced the Planning Commission's top-down allocations.
- The GST Council under Article 279A is the working model of shared Centre-State decision-making, operating largely by consensus.
- Limits: NITI Aayog lacks financial teeth, growing cesses dilute devolution, and the 2020 GST compensation standoff exposed the trust deficit.
- Institutional guarantees needed: regular Inter-State Council meetings, Punchhi Commission norms on Governors, widening the divisible pool.
Concrete cases, schemes and judgments
- S.R. Bommai v Union of India (1994) restraining Article 356
- 14th Finance Commission devolution hike from 32% to 42%
- GST Council created by the 101st Constitutional Amendment (Article 279A)
- GST compensation dispute between the Centre and States (2020)
- Sub-group of Chief Ministers on rationalising centrally sponsored schemes (2015)
Terminology to weave into the answer
cooperative federalismvertical fiscal imbalanceGST CouncilNITI AayogInter-State Councildivisible pool