ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Critical Importance of Cooperative Federalism

In addition to the three-pillar framework suggested by the Fifteenth Finance Commission, we suggest four constituents, namely the finance commission, NITI Aayog, goods and services tax, and de facto decentralisation, which will help strengthen the “cooperative” element—a key factor for Indian federation to work effectively. Further, the article focuses on finance commissions empowering the local governments and, in particular, assesses the Fifteenth Finance Commission’s thrust to empower the local bodies.



We are all in the gutter; but some of us are looking at the stars

— Oscar Wilde in Lady Windermere’s Fan

Alook at the larger picture of the Indian federation, keeping in mind the political backdrop of a majoritarian government with a fractured mandate at the centre, and coalition governments and the rising power of regional parties at the state level, drives home the need and significance of reinforcing and strengthening the “cooperative” element in our federal structure. It is indeed a sorry state of affairs that current debates among politicians have a personal note of unacceptable stridency and policy debates seem to have become a thing of the past. In this milieu, it would appear that cooperative federalism is a long shot. Yet, we firmly believe that the polity will have to strive for cooperative federalism. Competitive federalism of the current variety is sure to lead to a race to the bottom. We believe that going forward, the spirit of “cooperative” federalism would be best served by four constituents, namely the finance commission, NITI Aayog, goods and services tax (GST), and de facto decentralisation. These were first enunciated in Kelkar and Pethe (2019); here we elaborate on them a little more.

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Updated On : 14th Mar, 2022
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