Can Cooperative Federalism Carry Viksit Bharat Forward?

Introduction

India’s ambition to become a developed country by 2047 is often described as a national marathon. The image is appropriate because the journey will require endurance, coordination, institutional discipline, and a shared sense of direction.

However, India cannot complete this marathon through the efforts of the Union government alone. States control or influence many of the areas that will determine whether Viksit Bharat becomes a reality. These include public health, education, agriculture, policing, urban development, electricity distribution, local government, land administration, and the implementation of welfare programmes.

This makes cooperative federalism a practical requirement rather than a constitutional slogan.

For much of the last decade, the GST Council and NITI Aayog were presented as symbols of a more collaborative relationship between the Centre and the States. Yet this narrative is increasingly under strain. Political competition, fiscal disagreements, disputes over administrative control, and fears regarding representation have weakened trust.

Recent debates around tax devolution, medical entrance examinations, delimitation, women’s political representation, mineral taxation, and fisheries governance reveal a deeper problem. India’s federal institutions are often activated only after conflict has already intensified.

The question is no longer whether India needs cooperative federalism. The question is whether its existing federal structure is capable of supporting the scale and speed of transformation required for Viksit Bharat.

What Cooperative Federalism Actually Means

Cooperative federalism refers to a system in which the Union and State governments work together to achieve common objectives while respecting their separate constitutional powers.

It does not mean that States must agree with every decision taken by the Centre. It also does not mean that political differences should disappear.

A healthy federation allows disagreement while creating credible institutions for negotiation, consultation, and compromise.

India’s Constitution creates a strong Centre, but it also gives States substantial responsibilities. Legislative powers are divided through the Union List, State List, and Concurrent List. Financial relations are shaped by tax sharing, grants, borrowing rules, centrally sponsored schemes, and Finance Commission recommendations.

In practice, however, the Union government possesses greater financial and administrative capacity. It collects a large share of major taxes, controls important national institutions, and designs many programmes that States are expected to implement.

This imbalance makes cooperation essential. When trust declines, the constitutional distribution of powers alone cannot prevent friction.

The First Phase of Cooperative Federalism

The language of cooperative federalism gained renewed prominence with the replacement of the Planning Commission by NITI Aayog.

The Planning Commission had often been criticised for following a centralised approach in which States negotiated for plan funds with the Union government. NITI Aayog promised a more consultative model through meetings involving Chief Ministers, thematic councils, and policy partnerships.

The GST Council became an even stronger symbol of federal cooperation.

It brought the Union and the States into a common decision making body for indirect taxation. Decisions were often reached through consensus despite major political differences. This demonstrated that governments controlled by rival parties could cooperate when institutional incentives encouraged negotiation.

However, the first phase of cooperative federalism depended heavily on political goodwill and informal consensus. It did not always create permanent safeguards for moments when cooperation became difficult.

As political competition intensified, the limits of this model became visible.

Why the Federal Consensus Is Weakening

Several developments have placed pressure on Centre State relations.

The first is the growing financial dependence of States. State governments carry major expenditure responsibilities, but their taxation powers remain comparatively limited. The introduction of GST reduced their independent authority over several indirect taxes.

Although States receive a share of the divisible tax pool, they have raised concerns about the growing use of cesses and surcharges. Revenue collected through these instruments is generally not shared with States in the same manner as taxes within the divisible pool.

The second source of tension is the expansion of centrally sponsored schemes. Such schemes may support national priorities, but they can also restrict State flexibility. States are often required to contribute matching funds, follow centrally designed guidelines, and adopt uniform branding or delivery structures.

The third source is political centralisation. Disputes involving Governors, investigative agencies, university appointments, legislative assent, and centrally administered examinations have created suspicion among State governments.

The fourth source is the absence of regular institutional dialogue. When formal channels remain inactive, political disagreements move directly to courts, Parliament, public protests, or the media.

This converts manageable policy differences into constitutional confrontations.

GST and the Limits of Fiscal Cooperation

The GST Council was designed as an institution of shared sovereignty. Neither the Centre nor the States could independently control the entire indirect tax system.

This structure encouraged negotiation. However, the Council’s early success should not hide the pressures within the system.

States surrendered significant taxation autonomy in exchange for the promise of a stable and expanding revenue base. The initial compensation arrangement helped protect them from revenue losses during the transition.

Once the compensation period ended, several States became concerned about their long term fiscal space. Differences emerged regarding tax rates, compensation, compliance systems, and the treatment of specific goods and services.

The larger issue is that cooperative federalism cannot survive if one level of government controls the financial resources while another carries the responsibility for public delivery.

For Viksit Bharat, States will need to invest heavily in schools, hospitals, cities, infrastructure, climate resilience, and employment programmes. They cannot do this effectively without predictable revenue and reasonable borrowing capacity.

Fiscal federalism must therefore move beyond periodic transfers. It must provide States with greater certainty, flexibility, and accountability.

Delimitation and the Southern States’ Concern

The debate over future delimitation has created one of the most sensitive federal questions facing India.

Southern States have generally achieved lower fertility rates through sustained investments in education, health, women’s empowerment, and family welfare. Their concern is that a purely population based redistribution of parliamentary seats could reduce their relative political influence.

From their perspective, successful population control should not become a political penalty.

More populous States argue that democratic representation must reflect current population realities. A citizen in one region should not have substantially less parliamentary representation than a citizen in another.

Both positions raise legitimate constitutional principles.

The conflict cannot be resolved through numerical formulas alone. It requires a political settlement that protects democratic equality without weakening the voice of States that performed well on national development goals.

One option is to increase the total number of parliamentary seats while protecting the existing relative share of States for a defined period. Another is to include broader development indicators in discussions about representation and fiscal transfers.

What matters most is consultation. A decision imposed without federal consensus could damage national unity at the precise moment when India requires deeper cooperation.

Women’s Reservation and Federal Representation

The implementation of women’s reservation is closely linked with census and delimitation questions.

The principle of increasing women’s representation enjoys broad public support. Yet its implementation affects parliamentary constituencies, State legislatures, reservation rotation, and electoral boundaries.

This makes it both a gender justice issue and a federal design issue.

States must be involved in determining the administrative and political framework. Women’s representation cannot be treated as a technical exercise controlled entirely from the national capital.

A rushed process may create resistance even towards a reform that is normatively desirable. A consultative process can strengthen both women’s political participation and the legitimacy of the federal system.

This example shows why cooperative federalism requires participation before decisions are finalised, not merely cooperation during implementation.

NEET and the Question of State Autonomy

The National Eligibility cum Entrance Test represents another recurring federal tension.

Supporters of a national examination argue that it creates common standards, reduces the need for multiple entrance tests, and improves mobility across institutions.

Critics argue that a uniform examination may disadvantage students from State boards, rural areas, regional language backgrounds, and families unable to afford specialised coaching.

Some States also view medical education as closely connected to their public health systems. State medical colleges are financed substantially through State resources, while graduates are expected to serve local populations.

The issue is therefore larger than the design of one examination. It concerns the balance between national standardisation and regional diversity.

Cooperative federalism does not require choosing one principle and rejecting the other. It requires mechanisms through which national standards can coexist with State specific safeguards.

Mineral Royalties and the Eastern States

Mineral rich States have long argued that they bear the environmental and social costs of extraction while receiving an inadequate share of the economic benefits.

Mining can cause displacement, pollution, forest loss, pressure on water resources, and disruption of tribal livelihoods. Yet much of the value generated from minerals flows beyond the producing districts and States.

Disputes over royalties and the power to tax mineral rights therefore reflect a broader federal concern. Who should control the revenue generated from natural resources located within a State?

The Union has a legitimate interest in maintaining a coherent national mining and industrial policy. States have an equally legitimate claim to compensation for local costs and lost development opportunities.

A fair system must ensure that mineral producing regions receive sufficient resources for rehabilitation, infrastructure, health, education, and economic diversification.

Without such a settlement, resource rich States may remain development poor despite contributing heavily to national growth.

Coastal States and Fisheries Governance

Fisheries governance reveals another layer of federal complexity.

Marine resources do not follow administrative boundaries. Fish stocks move across coastal waters, while conservation decisions in one region may affect livelihoods in another.

The Centre has responsibilities relating to waters beyond the territorial jurisdiction of States, international obligations, trade standards, and national marine conservation. Coastal States manage local fishing communities, harbours, welfare schemes, and enforcement within their jurisdiction.

Conflicts can arise over fishing bans, vessel regulation, deep sea fishing, conservation zones, and access to marine resources.

A central policy designed without sufficient consultation may overlook local ecological knowledge and livelihood realities. State policies developed in isolation may fail to protect shared marine ecosystems.

Effective fisheries governance therefore requires joint decision making, reliable scientific data, and representation for fishing communities.

The Sixteenth Finance Commission’s Importance

The Sixteenth Finance Commission occupies a central position in the next phase of Indian federalism.

Finance Commissions determine how a share of Union tax revenue is distributed among the Centre and the States and among the States themselves. Their recommendations influence the fiscal capacity of every State government.

The challenge is to balance several competing principles.

Poorer States require support to provide comparable public services. Better performing States want incentives for fiscal discipline, demographic management, and efficient governance. Ecologically important States seek recognition for forests and environmental services. Rapidly urbanising States require resources for infrastructure and migration.

No single formula can satisfy every interest.

The Commission’s approach must therefore be transparent and based on clearly explained principles. States must understand not only what they receive, but why they receive it.

A credible fiscal settlement can rebuild trust. An arrangement perceived as arbitrary or politically influenced can deepen regional resentment.

Reviving the Inter State Council

India already possesses a constitutional platform for Centre State dialogue through the Inter State Council.

Its purpose is to discuss matters of common interest, investigate disputes, and improve coordination. However, it has not developed into a regular and influential forum for national federal negotiations.

This dormancy has created an institutional gap.

The GST Council deals primarily with indirect taxation. NITI Aayog focuses on development policy but does not possess the constitutional role of the Inter State Council. Zonal Councils address regional and security related matters, but their scope is limited.

India needs a permanent forum where Chief Ministers and the Union government can discuss major constitutional, administrative, and fiscal questions.

The Inter State Council should meet regularly with a fixed calendar. Its agenda should be prepared collaboratively. Its recommendations should be published, monitored, and reviewed.

A professional secretariat with independent research capacity would allow the Council to move beyond ceremonial meetings.

The Unfinished Agenda of the Sarkaria Commission

The Sarkaria Commission offered a comprehensive framework for improving Centre State relations.

Its recommendations emphasised consultation, restraint in the use of emergency provisions, neutrality in the appointment of Governors, stronger institutional dialogue, and respect for the constitutional role of States.

Many of these concerns remain relevant decades later.

Governors continue to become central figures in disputes involving government formation, legislative assent, and university administration. Article 356 is used less frequently than in earlier decades, but other forms of administrative and political conflict have emerged.

The deeper lesson of the Sarkaria Commission is that constitutional power should be exercised with restraint.

A federation cannot function only through legal authority. It also depends on conventions, trust, and respect for political mandates.

Implementing the spirit of the Commission’s recommendations would strengthen federal stability without weakening the Union.

What Cooperative Federalism 2.0 Requires

The next phase of cooperative federalism must be more institutional and less dependent on political goodwill.

First, the Inter State Council must become a regular forum for major national decisions affecting States.

Second, fiscal transfers must be predictable. States should receive greater clarity regarding tax devolution, grants, borrowing limits, and centrally sponsored schemes.

Third, the Centre should consult States before introducing policies in areas where implementation depends heavily on State machinery.

Fourth, Governors must function as constitutional authorities rather than political actors.

Fifth, national programmes should permit controlled State level adaptation. Uniform objectives do not always require uniform methods.

Sixth, disputes should be addressed through negotiation before they reach courts.

Seventh, local governments must become part of the federal conversation. Cooperative federalism cannot stop at State capitals. Municipalities and Panchayats deliver many of the services essential for Viksit Bharat.

Finally, national performance must be measured in a way that rewards States for achieving shared goals while supporting those with weaker historical capacity.

Conclusion

India’s journey towards Viksit Bharat will depend on whether its governments can convert constitutional federalism into functioning cooperation.

The Union can establish national priorities, mobilise resources, and coordinate large programmes. States understand local conditions, manage frontline institutions, and deliver most public services.

Neither level can succeed without the other.

The current tensions over taxation, delimitation, examinations, mineral revenue, fisheries, and political representation are not isolated disputes. They are signs that India’s federal compact requires renewal.

Cooperative Federalism 2.0 must therefore move beyond speeches, slogans, and occasional meetings. It must create regular institutions, fair financial arrangements, meaningful consultation, and respect for constitutional boundaries.

A developed India cannot be built by asking States merely to implement decisions taken elsewhere. It must be built through shared ownership.

Viksit Bharat is a national ambition, but its success will be determined State by State, city by city, district by district, and village by village.