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The Concept of Cooperative Federalism

­Cooperative Federalism (1930s–1970s) is a concept of federalism in which national, State and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally (such as the dual federalism of 19th century United States) or clashing over a policy in a system dominated by the national government.

It refers to a concept in which the State, local and federal government share responsibility in the governance of the people. They cooperate in working out details concerning which level of government takes responsibility for particular areas and creating policy in that area. This concept put forward the view that the national and State governments are partners in exercise of government authority.


In a vast country like ours, the spirit of cooperative federalism should guide the relations between the Centre and the States on the one hand, among different States and between the States and the Panchayati Raj Institutions (PRIs) and the Urban Local Bodies (ULBs) on the other. The essence of cooperative federalism is that the Centre and the State Governments should be guided by the broader national concerns of using the available resources for the benefit of the people. Cooperative federalism encourages the government at different levels to take advantage of a large national market, diverse and rich natural resources and the potential of human capabilities in all parts of the country and from all sections of the society for building a prosperous nation. It makes it possible to raise all the available resources by the Government at different levels in a coordinated way and channel them for use for the common good of the people. While a healthy competition among the States for evolving efficient and socially desirable policies and programmes is welcome, any competition which nullifies each other’s advantages in development and erodes the resource base of the States should be avoided.

Centre-State Relations

The relations between the Centre and the States in political, economic, financial and administrative spheres have been periodically reviewed. The Administrative Reforms Commission and the Sarkaria Commission were appointed to review the whole gamut of relations between the Centre and the States and to recommend measures, including changes in the Constitutional provisions, to harmonise the relationship between the centre and the States. While the Government has accepted and implemented several recommendations of the Administrative Reforms Commission, the recommendations of the Sarkaria Commission are under consideration in the Inter-State Council (ISC) which is trying to reach a consensus on various issues. Out of the 247 recommendations of the Sarkaria Commission, the Inter-State Council has taken a decision on 91 recommendations. The reactivisation of ISC has opened a new chapter in the Centre-State relations and provided a useful forum for building a common national approach on various issues.

Throughout history, different people have come up with different ways of dividing the responsibilities of government. One method of dividing this power is through cooperative federalism, in which the national government (often the legislature) enjoys almost unlimited authority to force the smaller parts of government (typically the States) to administer and enforce national policies.

In the United States, Cooperative federalism nicknamed ‘Marble Cake Federalism’ became prominent during the New Deal of the 1930s. During this time, President Franklin Delano Roosevelt and Congress created a variety of federal programmes as part of the New Deal, and these programs were administered by the States to help alleviate the effects of the Great Depression.

This article expresses my optimistic concern over the potential of the principle of cooperative federalism in Indian conditions rather than a denial of its being the best possible alternative. There is no denying the fact that the parliamentary federal system that India adopted was suitable for Indian needs. But India’s peculiar needs have compounded manifolds thus posing a formidable challenge of enlisting the desired cooperation from all three-the Centre, the States and the local sets of government.

Cooperative Federalism is a concept where Centre competes with States and vice-versa, and States compete with each other in their joint efforts to develop India. As a concept, it is more suitable to the countries like US, where it is in-built in their Constitution. In competitive federalism, States would compete with each other over a broad range of issues to provide citizens various services in a hassle-free manner. The policy of one size-fit-all is replaced with different policies of various States based on their own priorities within the State. Each State will design its own policies for development of the State with self-fund. The concept also promotes discipline among the States.

This term is currently gaining currency due to recommendations of 14th Finance Commission in which it has asked Central government to devolve greater share of taxes to the States and also due to formation of NITI Aayog in whose functioning States are having greater say than in the erstwhile Planning Commission.

In India Federalism is “an indestructible union of destructible States.”

Cooperative Federalism also called as Quasi Federalism is where a State, shares the powers between the Union/Centre and the States, while inclining towards the strong Centre.

Ex : In case of emergency times, the Centre takes the control of all the States—unitary in approach, whereas in normal times, the powers are divided between themselves—federal in nature.

In a departure from the past, the present NDA government is stressing on the need to leverage the potential of cooperative and competitive federalism for achieving all round in-elusive development in India. India opted for Quasi-federal structure after independence. Although the term ‘federal’ has not been mentioned in the Constitution, the working of Indian democracy is essentially federal in structure. After Independence from 1947 to 1967, India experienced the centralised federalism.

From 1967 to 1990, India witnessed confrontational federalism due to the emergence of other party governments at the State level. Since 1990, the State level political parties started becoming part of Central governments and this has led to the development of cooperative federalism. The Central government has to listen to the States’ problems and concerns.


While the competition between States, reflected in the World Bank’s Ease of Doing Business Index, has generated a lot of enthusiasm, this must be a continuing exercise. There are only few well-off States like Maharashtra, Gujarat and Tamil Nadu which are competing. There are deficit States or the backward regions or the States under debt. Those States should not be treated on par with the well-off States. The States like West Bengal, Bihar, Odisha and Assam have protested against the Uniform Approach in funding because of their special situations in which the central government has to provide special funds to these States. Without special funding these States cannot imagine their participation in competitive federalism.

Though the States are provided with financial independence, it is a fallacy to assume that all the States would perform uniformly in the process of development because while some States have favourable factors like skilled labour, capital and infrastructure, innovative service industries, other States are lagging behind.

Advantages and Disadvantages

It is important to understand that, in cooperative federalism, the States have an incentive to cooperate with the federal government. Al-though the federal government is ultimately in charge, the States can influence how programmes are implemented. In the best circumstances, the federal and State governments work together seamlessly to help their citizens increase their quality of life; however, when the States and the federal governments are in dis-agreement on a specific issue, the cooperative federalism can be very alive.

Working System

Cooperative federalism creates a relationship in which the national government strongly influences the policies and behaviours of State governments, often through the use of funding for programmes. For example, if the federal government is interested in ensuring that national highways are well-maintained, they might create grants in Aid, a specific kind of grant from the federal government that provides funds for the States to pursue a policy. With this kind of grant, the State or local governments may use funds provided by the national government at their discretion for the general purpose of improving living quality in that State.

Cooperative Federalism and Competitive Federalism

The concepts of cooperation and competition federalism seem to be contradictory and cannot exist together. Cooperative and competitive federalism are two sides of the same coin. The competition alone cannot give the best results; it is competition with cooperation that will drive the real change. To bring competition, the Centre should cooperate with the States by providing necessary autonomy in their policy making and allocating them the required funds to spend based on their own priorities. The cooperation forms the ground base on which competition can begin. There has to be a balance between cooperative and competitive federalism.

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