Aspirant Academy

Polity, Governance and Current Affairs

Cooperative Federalism in Practice

Federalism, Centre-State Relations

Paper III · Unit 1 Section 8 of 12 0 PYQs 28 min
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Cooperative Federalism in Practice

7.1 GST Council — Model of Cooperative Decision-Making

The GST Council (Article 279A, 101st Amendment 2016) is the most significant institutional innovation in Indian federalism. It comprises:

  • Union Finance Minister (Chairperson)
  • Union Minister of State for Finance
  • Finance Ministers of all States and UTs (with legislature)

Decision-making: Decisions by weighted majority — Centre's votes carry 1/3 weight; all states' votes together carry 2/3 weight; decisions require at least 3/4 of votes cast. This ensures states can block decisions against their collective interest but prevents any single state from vetoing.

Significance: First time the Constitution directly created a joint Centre–State institutional mechanism for policy-making. Subsumed over 17 central and state taxes. Generated ₹1.87 lakh crore monthly GST collection (March 2024 — record high).

7.2 NITI Aayog — Competitive and Cooperative Federalism

Governing Council: All Chief Ministers + LGs of UTs + Vice Chairperson + CEO.

Three models of federalism operationalised:

  1. Cooperative federalism — states as equal partners; no one-size-fits-all approach
  2. Competitive federalism — states ranked on performance (SDG Index, Ease of Doing Business, Water Management Index, Health Index, Education Index)
  3. Asymmetric federalism — special category states and NE/hill states get different treatment

Key difference from Planning Commission: Planning Commission allocated funds through Five Year Plans (centre-decided allocations); NITI Aayog only advises — funds flow through Finance Commission devolution and CSS. States are no longer "applicants" to a central body for their development needs.

7.3 Inter-State Disputes — River Water Disputes

A major source of Centre–State and inter-State conflict. Article 262 provides that Parliament can adjudicate inter-state water disputes by law; the Supreme Court is excluded from jurisdiction. The Inter-State River Water Disputes Act 1956 established a tribunal mechanism.

Ongoing/recent tribunals:

  • Cauvery Dispute (Karnataka/Tamil Nadu — final order 2018, SC intervention multiple times)
  • Krishna River (Andhra Pradesh/Telangana/Maharashtra/Karnataka)
  • Ravi-Beas (Punjab/Haryana/Rajasthan)

Rajasthan's Water Interests:

  • Rajasthan has been a key disputant in the Ravi-Beas water dispute — claiming its share under the 1981 Ravi-Beas Waters Agreement
  • The Indira Gandhi Canal (Rajasthan Canal) — longest irrigation canal in India (~650 km) — depends on Punjab fulfilling its share from Ravi-Beas waters
  • Chambal River (Rajasthan–Madhya Pradesh joint project)