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Concept of federalism part 3- Cooperative and Competitive Federalism | POLITY

Introduction | Concept of federalism part 3- Cooperative and Competitive Federalism

  • Federalism is derived from the Latin world foedus, which means agreement.
  • In fact federation is an agreement between two types of governments sharing power and controlling their respective spheres.
  • Thus a federation is a system of national and local governments, combined under a common sovereignty with both national as well as federating units having autonomous spheres assigned to them by the constitution.
  • India opted for quasi-federal structure after independence.
  • The term “federal” has not been mentioned in the constitution but the working of Indian democracy is essentially federal in structure.
  • However, it is the practical working style of federalism, which brought the concept of cooperative federalism and competitive federalism in India.

Cooperative federalism 

  • In Cooperative federalism the Centre and states share a horizontal relationship, where they “cooperate” in the larger public interest.
  • It is an important tool to enable states’ participation in the formulation and implementation of national policies.
  • Union and the states are constitutionally obliged to cooperate with each other on the matters specified in Schedule VII of the constitution.

Competitive federalism 

  • In Competitive federalism the relationship between the Central and state governments is vertical and between state governments is horizontal.
  • This idea of Competitive federalism gained significance in India post 1990s economic reforms.
  • In a free-market economy, the endowments of states, available resource base and their comparative advantages all foster a spirit of competition. Increasing globalisation, however, increased the existing inequalities and imbalances between states.
  • In Competitive federalism States need to compete among themselves and also with the Centre for benefits.
  • States compete with each other to attract funds and investment, which facilitates efficiency in administration and enhances developmental activities.
  • The investors prefer more developed states for investing their money. Union government devolves funds to the states on the basis of usage of previously allocated funds.
  • Healthy competition strives to improve physical and social infrastructure within the state.
  • Competitive federalism is not part of the basic structure of Indian constitution. It is the decision of executives.

Constitutional Position | Concept of federalism part 3- Cooperative and Competitive Federalism

  • Article 1 of the Constitution states, “India, that is Bharat, shall be a Union of States”. While the Constitution doesn’t mention the term “federal”, it does provide for a governance structure primarily federal in nature.
  • It provides for separate governments at the Union and in the states. Further, it specifies and demarcates the powers, functions and jurisdictions of the two governments. Lastly, it details the legislative, administrative and financial relations between the Union and the states.
  • The distribution of legislative powers has been divided into three lists: the Union List, the State List and the Concurrent List. The Union List, comprising the “vital interests of the State”, is the longest.’
  • On the Union List, Parliament has exclusive powers to legislate. While the state has exclusive powers to legislate on the State List, in certain situations, Parliament can also do so.
  • As per the Concurrent List, the issue is more complex.
  • In case of a conflict between a state and a Central legislation, the parliamentary legislation shall prevail.
  • This, coupled with the fact that residuary powers of legislation are vested in the Union, gives a “unitary” tilt to federalism in India.
  • A disconcerting trend has been observed since 1950. While the Union and Concurrent Lists have expanded, the State List seems to have shrunk. This has led many to question the structure of Indian federalism and to propose its remodelling.



Indian Polity

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