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Narendra Modi’s concept of “cooperative, competitive federalism” is work in progress. How it will be implemented in a politically fractured polity is not clear. There’s also the issue of regional disparities and the fact that states vary in size and resources. Questions also about the Niti Aayog and what its contribution will be.By KALYANI SHANKAR

Ever since the Modi government assumed office, the chant of ‘cooperative federalism’ has grown louder. This is Prime Minister Narendra Modi’s new buzz word and the concept behind this, is competition between different states in the spirit of what he calls “cooperative, competitive federalism.”

Is this a myth or something real? Can it work in India in the present circumstances when the polity is fractured? These questions need to be probed as the concept is still evolving.

Even as chief minister of Gujarat, Modi has advocated this concept as he probably felt that provincial chieftains were not getting their due from the Centre. He had experience of what happens at both ends. During the 2014 election campaign, Modi promised that if he came to power he would enforce cooperative federalism. While promoting his Gujarat model, he also welcomed other development model initiatives to encourage competition in a healthy manner. He suggested that instead of the prime minister sitting on the dais in the chief ministers conferences, they should go for a round table model where everyone is equal.

According to the Indian Constitution, while the Centre enjoys broad decision-making powers, it also needs the cooperation of the provincial governments as implementation of the Central policies is done by the states. For instance, land and police powers are with the states. While the Centre may decide to build new airports or power plants, the land required for these would have to be acquired by the provincial governments. Even Centrally sponsored schemes are implemented by state chief ministers.

Therefore, Modi’s pet concept might work only if the chief ministers were serious about delivering governance and the Centre keen on cooperation even with the non–BJP ruled states, rising above party politics. This has to be a two -way traffic but it does appear difficult. Look at what happened at the Congress chief ministers’ meeting convened by the AICC chief Sonia Gandhi some time ago. They complained of step motherly treatment to their states. It was a classic example of how difficult it is going to be to implement cooperative federalism.

While states might benefit if they are keen to remain on the right side of the Centre, or if they want the Centre to loosen its purse strings, as West Bengal chief minister Mamata Banerjee found when she supported the historic Land Boundary Agreement with Bangladesh recently. In fact, chief ministers like Tamil Nadu’s late M.G.Ramachandran always tried to be in the good books of the Centre, which benefitted them enormously.

Having spelt out his cooperative federalism concept, what has the Prime Minister done to implement it? The first was the implementation of the 14 Finance Commission recommendations which gave more money to the states. So he has passed this first test creditably. They now get another 26-28% of the central pool of tax revenues without conditions. The demand for increased devolution and freedom to modify centrally sponsored schemes is something the states have been demanding for some time now.

Modi’s pet concept might work only if the chief ministers were serious about delivering governance and the Centre keen on cooperation even with the non–BJP ruled states, rising above party politics

The second step was to bring about federal balance. Modi wound up the Planning Commission replacing it with a new body called Niti Ayog, where all chief ministers are considered equal partners in its governing council, and policy guidelines would be decided at their level. The chief ministers had resented the extensive micro management of finances which forced them to spend more on Centrally sponsored schemes. However, the two meetings held so far by the Niti Ayog does not promise much as the non-NDA chief ministers boycotted it.

There is also criticism that the new body was brought in without paying attention to the needs of different categories of states. Also, the left parties point out that the concept is based on one model of economy but one size doesn’t fit all. When the Goods and Services Tax becomes law it will help some less productive states, but it is going to be difficult for the Niti Ayog to balance cooperative federalism and competitive federalism in view of the size and richness of individual states. After all, the Constitution provides for more cooperative rather than competitive states as is evident from the distribution of power. What will be the contribution of the Niti Aayog is another question as it is still evolving.

Prime Minister Modi has taken yet another step of reaching out to the regional satraps, but it is too early to predict whether he will succeed. There are strong charismatic leaders as CMs in state capitals. Mamata Banerjee in West Bengal, Jayalalithaa in Tamil Nadu, Chandrababu Naidu in Andhra Pradesh, K.Chandrasekhara Rao in Telangana, Kejriwal in Delhi and other. They do not depend on their high command as they can win state elections showcasing their performance in exactly the same manner as Narendra Modi did in Gujarat.

As for competitive federalism, it is a myth as it is increasingly clear that the states are unevenly equipped to engage in fair competition. There are rich states and there are poor states and there are special category states. The states are unevenly equipped to engage in fair competition due to regional disparities. Enhanced devolutions across the board do not address this problem.

On the whole, the jury is out and it would be premature to predict whether cooperative or competitive federalism will work in the present circumstances where there is no single party that is dominant.


  • Modi’s concept of “cooperative federalism” is intended to bring better balance between Centre and states
  • The presence of charismatic state level politicians with a record of good governance makes them hard to deal with
  • The NITI Aayog which is spearheading cooperative federalism is still evolving and will take time to come into its own
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