Comment: Cooperative federalism in India-its problems and prospects. (1998, 20 Marks)
Granville Austin called the Indian design cooperative federalism: a strong general government combined with states that remain governments, not agents. The dependence runs both ways:
- The states rely on the Union for money. They raise under two-fifths of general-government revenue but spend about three-fifths.
- The Union relies on the states to administer most of its laws.
The interdependence is sound; the problems, and the prospects, lie in how it is governed.
Problems
| Domain | Problem | Current evidence |
|---|---|---|
| Fiscal | Vertical imbalance; the Union shapes the size of the pool | Cesses cut the divisible pool to ~81% of gross tax revenue. The Sixteenth Finance Commission kept devolution at 41% and refused to cap cesses |
| Borrowing | Art. 293(3)–(4) makes Union consent a de facto ceiling | State of Kerala v. Union of India was referred to a Constitution Bench (2024) and is pending |
| Schemes | Centrally sponsored schemes pre-commit state budgets | The VB-G RAM G Act, 2025 replaced MGNREGA with a 60:40 Centre–state sharing pattern |
| Institutions | Consultative rather than co-decisional | Inter-State Council last met in 2016. NITI Aayog’s Governing Council only advises. The GST dispute mechanism under Art. 279A(11) was never built |
| Governor and agencies | Central instruments inside state administration | In Re: Assent (Nov 2025) rejected timelines for assent. Eleven states have withdrawn general consent to the CBI |
| Horizontal | Weak machinery for disputes between states | The Cauvery took from a 1990 tribunal to a 2018 judgment. The SYL canal is still unresolved |
Two analytical points explain the pattern.
First, M. P. Singh argues that cooperative federalism is the idea and bargaining federalism the practice. Outcomes track a state’s leverage in Delhi, so many centre–state disputes are really party-to-party disputes.
Second, the pressure has migrated. After S. R. Bommai (1994) made Art. 356 costly, friction moved into fiscal design, the Governor’s office and central agencies. Rising Art. 131 suits (West Bengal, Kerala, Tamil Nadu) show cooperation giving way to litigation.
Prospects
- The GST Council shows that co-decision works. Neither side can act alone under its weighted voting. GST 2.0 (September 2025) collapsed the slabs through negotiation. Union of India v. Mohit Minerals (2022) described federalism as a continuing dialogue.
- The courts supply a floor. Two nine-judge benches in 2024 widened state competence. Mineral Area Development Authority v. SAIL allowed states to tax mineral rights. State of UP v. Lalta Prasad Vaish allowed them to regulate industrial alcohol.
- Horizontal forums are reviving. The Zonal Councils have taken up about 1,580 issues and resolved roughly 83%. The 31st Southern Zonal Council (August 2026) put water and delimitation on its agenda.
- Politics has reopened the federal axis. The 2024 coalition restored partner-state bargaining. The defeat of the 131st Amendment Bill (April 2026) showed that a cross-party bloc of states can block a constitutional change.
- The reform agenda already exists. The Sarkaria (1988) and Punchhi (2010) Commissions proposed:
- a regularly convened, statutory Inter-State Council with its own secretariat;
- a consultative, panel-based choice of Governors;
- a stronger voice for states in fiscal design.
Two further steps would matter most: building the Art. 279A(11) dispute mechanism, and bringing cesses within the divisible pool.
Conclusion
India’s cooperation in administration is dense and stable. Its cooperation in decision-making is thin and depends on the party arithmetic of the day. The prospects are real, but they depend on institutions. Cooperative federalism will mature only when the GST Council’s model of joint decision is extended to borrowing, schemes and shared resources. Until then, the states’ main tools remain bargaining and litigation.