Approach:

Introduction: Define cooperative federalism.

Body: Bring out its significance and also mention the steps taken by the Government of India towards strengthening cooperative federalism in India.

Conclusion: Mention what more needs to be done to strengthen the idea of cooperative federalism.

Answer:

In cooperative federalism, the Centre and states share a horizontal relationship, where they work in tandem to advance the greater public good in the domains outlined within the 7th schedule of the Constitution. It is an important tool to enable states’ participation in the formulation and implementation of national policies.

Significance of cooperative federalism:

• Move away from the “one-size-fits-all” approach: The Centrally-sponsored schemes follow a “one-size-fits-all” approach. On account of this, there are disputes concerning the implementation of these schemes. For example - Telangana, Odisha, and Kerala have said they will not implement the PMJAY scheme. So, the central government should take into account the concerns of the respective state concerning the formulation of these schemes.

1. Conflict Resolution: Cooperative federalism provides a platform for resolving inter-state disputes amicably through dialogue and negotiation, reducing the need for legal battles under Article 131. The creation of interstate councils fosters cooperation on common issues. For example - Through inter-state councils, broad agreements could be reached between the Union and States before introducing legislation in Parliament on matters related to the Concurrent List.

• Effective policy Formulation: NITI Aayog has provided the states with a platform where they can share their best practices and where the Centre and state could collaborate upon issues of national importance. This has enabled us to launch the Aspirational Districts Programme for the development of backward districts; framing model laws for land leasing and agriculture marketing reforms; and area-specific interventions for the North-Eastern and Himalayan States and island development.

• Realize fiscal federalism: GST Council provides a platform for the Union and State governments to collaborate on tax policy matters as the decisions are made based on consensus. This has enabled us to harmonize GST laws across the country and to realize the idea of “One Nation, One Tax, One Market”.

• Emergency Response: During the COVID-19 pandemic, cooperative federalism was on full display. As the Centre and state governments together evolved synergies to address the shortage of critical resources like healthcare centres, testing kits, ventilators and PPEs, facilitated the framing of contact tracing protocols, and promoted knowledge sharing. 

Steps taken towards strengthening cooperative federalism in India:

• NITI Aayog: Its creation enabled us to shift from a command and control approach to a “bottom-up” approach, as it accommodates diverse points of view in a collaborative setting. Example: Team India Wing.

• Inter-State Councils:  Under Article 263, this council is expected to inquire and advise on disputes, discuss subjects common to all states and make recommendations for better policy coordination.

1. GST Council: The GST Council exemplifies cooperative federalism in India by bringing together central and state governments to collaboratively decide on GST rates, exemptions, and administrative procedures, streamlining taxation and fostering a unified economic framework.

• Zonal Councils: Zonal Councils in India, comprising representatives from the centre and states in specific geographic zones, exemplify cooperative federalism. They promote dialogue, cooperation, and conflict resolution among states, fostering a spirit of unity and collective decision-making, vital for addressing regional concerns and ensuring balanced development across the nation.

• National Integration Council: This council was constituted in 1961, to examine the problems of national integration and to make necessary recommendations to deal with it.

To further strengthen the idea of cooperative federalism we need to ensure that Inter-state councils have regular meetings, NITI Aayog must ensure productive engagement and dialogue with the states to develop a growth roadmap and there should be an effective mechanism to involve states in the finalization of the Terms of reference of the Finance Commission.