What do you understand by the terms 'cooperative federalism' and 'competitive federalism'? Do you agree with the view that the Indian Constitution is based on the concept of 'competitive federalism' and not on the concept of 'cooperative federalism'?

Defining Cooperative and Competitive Federalism

Cooperative Federalism refers to a system where the Union and State governments work together to achieve common goals, emphasizing mutual respect, consultation, and shared responsibility. It assumes a degree of trust and a willingness to compromise. Key elements include regular inter-state council meetings, fiscal equalization measures, and joint planning initiatives.

Competitive Federalism, conversely, emphasizes a degree of competition among states to attract investment, improve governance, and enhance socio-economic development. While not inherently negative, it can lead to states asserting their autonomy and sometimes engaging in practices that might be perceived as undermining national unity or creating uneven development. It’s not about conflict, but about striving to outperform others.

Constitutional Provisions & Arguments for Cooperative Federalism

Several constitutional provisions initially suggested a leaning towards cooperative federalism:

• Article 263: Establishes an Inter-State Council to discuss and recommend measures for the coordination of federal policies.
• Article 368: Requires ratification by both Parliament and at least half of the State legislatures for constitutional amendments, demonstrating a shared power.
• All-India Services: IAS, IPS, IFS, recruitments and postings are managed by the Union, fostering a sense of shared responsibility.

Early initiatives like the Planning Commission (later NITI Aayog) also reflected a cooperative spirit, aiming for national development goals through consultation.

Shifting Trends & Arguments for Competitive Federalism

However, post-liberalization, a shift towards competitive federalism became evident. Several factors contributed:

• Fiscal Decentralization: The introduction of the Goods and Services Tax (GST) in 2017, while intended to create a common market, also resulted in states having less control over their revenue, leading to increased competition for attracting businesses.
• Legislative Autonomy: States have increasingly enacted laws on subjects within their legislative competence, sometimes leading to conflicts with central laws (e.g., farm laws protests).
• Economic Competition: States compete to attract Foreign Direct Investment (FDI) through relaxed regulations and incentives, as seen in the electronics manufacturing sector. For example, several states have offered incentives to attract semiconductor manufacturing units.
• Increased Assertiveness: States have become more vocal in asserting their rights and demanding greater autonomy, particularly regarding resource allocation and policy decisions.

Is the Indian Constitution Based on Competitive Federalism?

While the Constitution’s framework initially leaned towards cooperation, the subsequent evolution of Indian federalism points towards a more competitive model. The balance is not absolute. India doesn’t exemplify a purely competitive model where states act in isolation; rather, it's a complex interplay of both cooperative and competitive forces.

Feature	Cooperative Federalism	Competitive Federalism
Emphasis	Collaboration, consensus	Competition, autonomy
Goal	National unity, shared development	State-level growth, improved governance
Examples	Inter-State Council, Planning Commission (NITI Aayog)	State-level investment policies, GST disputes

Case Study: The GST Implementation

The implementation of GST exemplifies the tension between cooperative and competitive federalism. While designed to be a cooperative effort, disagreements over revenue sharing, compensation mechanisms, and the scope of state powers have created friction and highlighted the competitive aspects of the system. Several states have voiced concerns about revenue losses and demanded greater flexibility.