Co-operative Federalism: An Indian Perspective

What is Co-operative federalism?

Co-operative federalism, in general terms, is a concept wherein the federal government, state government, and local government interact co-operatively and share their responsibilities in the governance. Corwin defines co-operative federalism thus: “The States and National Governments are regarded as mutually complementary parts of a single governmental mechanism all the whose powers are intended to realise the current purposes of government according to their applicability to the problems in hand.”[1]

This concept of federalism has helped in the promotion of federal system, with its divided jurisdiction, to act in unison. This concept puts in a view that the national government and the state governments are partners in their governance. It is also considered as a new form of federalism. This new concept is influenced by the factors which are given as follows:

  • The emergence of the concept of welfare state, which is strongly based on the public opinion, has made the local units more dependent on the national governments for adequate resources.
  • National decisions take precedence over the points of Centre-State division of powers when a war is urgently necessary for national survival.

It is necessary for the governments in a federation to coordinate among themselves with cooperation to promote the public welfare, which is the motto of majority governments nowadays. Capital resources are largely deposited with the Centre, and being in coordination with the Centre is the only way of achieving the motto, thus bringing the two levels of governments closer. Furthermore, it is for that reason in the U.S.A., the essence of the intergovernmental cooperation is mainly seen in the conditional grants, which were sent from the Centre to the State for centrally sponsored schemes[2].

Australia has also developed the concept of cooperative federalism by establishing the Commonwealth Grants Commission and the Australian Loan Council, 1927 to help the various governments in borrowing. Canada has also developed some techniques of this concept by granting funds from the Centre to the provinces and by delegating the power by the Centre and the Province to some subordinates agencies created by the governments. The concept of cooperative federalism has provided the necessary flexibility and resiliency to an otherwise rigid constitutional framework so as to enable it to cope with the newly emerging demands and challenges.[3]

Do we practise Co-operative Federalism?

It is a fact that we practise and promote the concept of cooperative federalism. The framers of our Constitution took a good note of the growing trend of cooperative federalism and understood that there cannot be a line of command drawn from the Centre to the State, and the policies can be promoted not by dictation but by a process of discussion. When we look at our Constitution, several provisions and features have been deliberately designed to promote the concept of Centre-State cooperation.

  • Article 252(1) provides for delegation of powers by two or more states to Parliament so as to enable it to legislate with respect to a matter in the State List in relation to such states. It simply means that if it appears to two or more states that any matter in the State List should be regulated by the Parliament then those states can request the Parliament, and the Parliament can legislate with respect to the matter in the State List concerning that states.
  • The Indian Constitution[4] provides for a scheme of tax sharing between the Centre and the State. This means that the Centre should share some taxes collected with the States. The taxes which are collected by the States are used by them but the taxes levied by the Centre cannot be exclusively used by it. It should share some of the taxes.
  • Apart from the scheme of tax sharing, there is another way of transfer of revenue from the Centre to the State and that is the system of grants-in-aid[5]. Article 282 provides for the making any grants by the Union for any public purpose.
  • To reduce the rigidity, which may arise from the Centre-State division of administrative power, the Indian Constitution makes provisions for the intergovernmental delegation of administrative power.[6]
  • Article 312 introduces an important feature to the Indian Constitution, which provides that besides having separate services for the Centre and State, the Centre can create certain services common to both the Centre and State.[7] If the Rajya Sabha declares, by resolution supported by not less than two-thirds of the members present, and it is necessary or expedient in the national interest so to do, Parliament may be by law provide for the creation of one or more All India Services (including an All-India Judicial Service and regulate recruitment and conditions of service of it.[8]
  • Article 261(1) lays down that full faith and credit should be given throughout the territory of India to public acts, records and judicial proceedings of the Union and of every State. This is to give them a nation-wide application.
  • Article 263 provides that the President may be by order appoint an Inter-State Council if it appears to him that the public interests would be served by the establishment of a Council.[9] The president may define the organisation, procedure and duties of the Council. The main idea behind this is to create intergovernmental consultation machinery so that the coordination is maintained.
  • Zonal Council have been introduced in India by the State Re-organisation Act, 1956. These Zonal Councils were created to promote the mechanism of intergovernmental consultation and coordination in socio-economic fields.

The best example of Centre-state co-operation is the case of Jaora Sugar Mills v Madhya Pradesh[10]. In this case, the Madhya Pradesh Government enacted the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958 which made a sugarcane cess payable as prescribed under the Act. This Act was later on found to be invalid since the legislative competence for the same rests with the Centre under the Union list. And so it was struck down. But the Parliament realized that this Act along with several other state Acts suffered from the same Constitutional inconsistency and infirmity. In order to meet this situation Parliament passed the Sugarcane Cess (Validation) Act 1961. The appellants were asked to pay cess for two years. As the High Court dismissed the petition the appellants challenged the constitutional validity of such an Act arguing that it was a piece of ‘colourable legislation’. The Supreme Court held that the Act was constitutionally valid though the intention behind it can be questioned.

A reference can be made to a recent plan NITI Aayog which was set up mainly to promote the co-operative federalism and giving the State more freedom to design the developmental plans. The Governing Council’s maiden meeting which was conducted in the first week of February 2015 demanded greater freedom for the States to frame their developmental plans.[11] This means that our country focuses much on the promotion on the concept of co-operative federalism and they consider it as form federalism.

Conclusion

It is an undisputed fact that the concept of federalism is not static but dynamic. It has to undergo several processes of evolutionary tests and adjustments from time to time to make it fit for meeting the modern day challenges and demands. It is understood that constant discussions and negotiations between the Centre and the State are necessary in order to remove the frictions and the problems of the intergovernmental cooperation. Our aim should be to sort out these differences and make the Indian Federalism a reliable and an operational system so that India may successfully meet the upcoming challenges on socio-economic development, internal and external security, defence etc.

[1] THE CONSTITUTION OF THE USA., SENATE DOC., 14 (1953)

[2] See People of the State of New York v O’Neill, 359 US 1 (1959)- judicial support to the development of cooperative federalism in the U.S.A.  

[3] Sawyer, Modern Federalism, 70-8, 92, 100, 152 (1969)

[4] In 2003 Article 268A was introduced which provides that taxes on services shall be charged by the Union of India and shall be appropriated between the Union and States. The new Article 270 provides that the net proceeds of all taxes and duties referred to in the Union List levied and collected by the Centre shall be distributed between the Centre and States

[5] Article 270 make provision for the ‘fiscal’ need grants

[6] Article 258(1)- Notwithstanding anything in this Constitution, the President may, with the consent of the Governor of a State, entrust either conditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends.

[7] Article 312(1)- Notwithstanding anything in Chapter VI of Part VI or Part XI, if the Council of States has declared by resolution supported by not less than two thirds of the members present and voting that it is necessary or expedient in the national interest so to do, Parliament may by law provide for the creation of one or more all India services (including an all India judicial service) common to the Union and the States, and, subject to the other provisions of this Chapter, regulate the recruitment, and the conditions of service of persons appointed, to any such service

[8] See D.S. Garewal v. State of Punjab AIR 1959 SC 512

[9] Generally it may be charged with the duty of

(a) Inquiring into and advising upon disputes which may have arisen between States;

(b) Investigating and discussing subjects in which some or all of the States, or the Union and one or more of the States, have a common interest; or

(c) making recommendations upon any such subject and, in particular, recommendations for the better coordination of policy and action with respect to that subject, it shall be lawful for the President by order to establish such a Council, and to define the nature of the duties to be performed by it and its organisation and procedure.

[10] 1966 AIR 416, 1966 SCR (1) 573

[11] See http://www.thehindu.com/opinion/editorial/for-cooperative-federalism/article6883340.ece

last seen 1.11.2015


ABOUT THE AUTHOR

Aravind Prasanna

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Aravind Prasanna is a fourth-year year Law student pursuing B.A. LL.B (Hons.) at VIT School of Law, Chennai. He is an avid mooter and more, a good researcher. He possesses wide interests in keeping track of the emerging trends in law.

 

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