Introduction
Cooperative and competitive federalism represent a shift in India's governance from a top-down model to a dynamic, collaborative framework essential for achieving national developmental goals. While cooperative federalism emphasizes shared sovereignty and consensus-building, competitive federalism leverages healthy interstate rivalry to spur economic growth and administrative efficiency.
Significance of the Dual Federal Approach
- Cooperative Federalism: Fosters shared sovereignty and policy consensus across tiers of governance. For example, the GST Council (Article 279A) exemplifies collaborative decision-making where the Union and States jointly pooled taxation powers, while the Inter-State Council (Article 263) serves as a constitutional forum for resolving administrative and inter-governmental disputes.
- Competitive Federalism: Drives economic efficiency, governance innovation, and structural reforms via benchmarking. For instance, Maharashtra topping NITI Aayog's Export Preparedness Index (2024) and scoring high on investment indices actively incentivizes peer industrial states like Gujarat and Tamil Nadu to streamline regulatory frameworks and bolster ease of doing business.
Challenges Faced by Maharashtra in Centre-State Relations
- Fiscal Imbalance in Devolution: Despite contributing the highest share to national direct taxes and Gross Goods and Services Tax (GST) collections, Maharashtra receives a comparatively lower proportional share of central tax devolution due to the Finance Commission's redistributive criteria (such as income distance), constraining its own fiscal space for capital expenditure.
- Gubernatorial Friction: Recurrent disputes over the scope of the Governor's discretionary powers under Articles 163 and 200—including delays in granting assent to state bills and political controversies during government formation—have challenged constitutional conventions and the spirit of the S.R. Bommai judgment.
- Administrative and Institutional Overreach: Friction frequently emerges over the jurisdiction of central investigative agencies and the rigid operational guidelines of Centrally Sponsored Schemes (CSS), which curtail the state's functional autonomy.
- Policy and Infrastructure Tussles: Intermittent delays in securing central environmental and coastal clearances for high-priority urban infrastructure projects, along with friction over central policy mandates, create administrative bottlenecks.
Conclusion
To build a robust federal architecture, the recommendations of the Punchhi Commission on revitalizing the Inter-State Council must be operationalized alongside a more balanced fiscal devolution model that adequately rewards economic performance.