GOOD MORNING MA’AM AND EVERYONE PRESENT OVER HERE.

THE TOPIC FOR TODAY’S PRESENTATION IS “COOPERATIVE VS COMPETITIVE

FEDERALISM”

NOW BEFORE MOVING ON TO WHAT IS COOPERATIVE AND COMPETITIVE

FEDERALISM, LET US SEE HOW A GOVERNMENT IS STRUCTURED IN A COUNTRY
WHICH DETERMINES THE POWER BETWEEN THE STATES AND ITS CITIZENS.

SO, THERE ARE THREE TYPES OF GOVERMENTAL STRUCTURES.

1. UNITARY
2. CONFEDERAL
3. FEDERAL

IN A UNITARY FORM OF GOVT AS WE ALL KNOW THAT THE GOVT WILL HAVE A
STRONG CENTRE AND WEAK STATE OR REGIONAL GOVT.

IN A CONFEDRAL FORM OF GOVT, THE GOVT WILL HAVE STRONG STATE GOVT,
BUT WEAK CENTRAL GOVT.

BUT IN A FEDERAL FORM OF GOVT, THE POWERS ARE SHARED BETWEEN

CENTRAL AND STATE GOVT.

Federalism is derived from the Latin world foedus, which means agreement. In fact federation is
an agreement between two types of governments sharing power and controlling their respective
spheres. Thus a federation is a system of national and local governments, in which both national
as well as federating units have autonomous spheres assigned to them by the constitution.

Also now let us see as to what is cooperative and competitive federalism.

The cooperative federalism involves the Centre and States governments cooperating with each
other for the overall development of the nation. It involves the participation of all the States in
the creation and implementation of the national policies of the country. It is the horizontal
relationship between the Centre and the States.

COMPETITIVE FEDRALISM

 The states compete with each other and the centre for the individual economic

growth and development.

 The states compete with each other for funds and investments from external

sources.
  They are funded by the central government based on their performance with the

previous funds.

 Relationship between the Central and state governments is vertical and between

state governments is horizontal.

NOW, LETS US SEE HOW FEDERALISM HAS DEVELOPED IN UNITED STATES OF

AMERICA. BECAUSE USA WAS THE FISRT COUNTRY TO ADOPT FEDERAL FORM
OF GOVT IN ITS CONSTITUTION.

USA also didn’t adopted federalism in its constitution directly. It went through a transition of 1 st
competitive federalism, dual federalism, then cooperative federalism, and then it adopted new
federalism for their constitution.

So in america’s constitution there was a phase called as nullyfying phase and during this phase
there was constantly a spirit of competition b/w the states and federal govt. Because whenever
the federal govt tried to come up with certain policies for the states. The states did not take it in a
good spirit. And they keep on challenging whatever the fedral govt was coming up with. So there
was a sense of competition b/w them. Also the states in USA were so independent, there were so
determined not to loose their autonomy, there was a sense of competition not only with the
federal govt but also with the states. It was only after the civil war, the nullyfying pahse came to
an end. And after the civil war the balance of power titled in favour of federal govt and there was
a prevalence of federal govt over the states.

Then after the competitive phase, dual federalism existed in which there were clear demarcated
areas for state and federal govt and there was no encroachment on each others reserved area.
They have their own identified and independent spheres. This kind is also called as layer cake
federalism. Beacause the areas are easily identifiable.

Then the govt underwent a change after great depression, as no. Of people lost their jobs,
standard of living fell during depression and the hence the govt realised that for the betterment
of their people they need to join hands together with the state govts. And this particular period
from 1930s came to be marked as cooperative federalism which is also called as marble cake
federalism because everything is so mixed up where the areas cannot be separated and identified.

Then after cooperative federalism, the USA went to a little another extent termed as new
federalism. And in this there was devolution of powers from the central govt back to the state
govt again. It was same earlier also, before the constitution came to be made, as in the states
being more powerful than central govt. but this time it is absolutely different from earlier time.
Because earlier there was no idea of unity. But this time state feels they are unified and they are
happy with this talkdown approach where federal govt is actually giving or devolving certain
powers to the state govt.
It attempted to shift power to the states by consolidating categorical grants to block grants
and giving the states authority to over programs such as welfare.

This is how a transition has actually happened in america’s constitution.

But when we made our constitution we were very clear to incorporate the provisions of
cooperative federalism right under our constitution. We didn’t wait for certain lessons to
be learnt from our own faults and failure. We learnt the lessons from someone else’s fault
and clearly incorporated those provisions which talk about cooperative federalism.

India model of federalism is called as quasi federal system as it contains major features of
both the federation and union. Federalism is a system of govt in which power is divided
between central authority and constituent units.

DEVELOPMENT OF CO-OPERATIVE FEDERALISM IN INDIA

COOPERATIVE FEDERALISM : This assumes that the two levels of government are
essentially partners.

India earlier had one party rule. But then there was a rise of regional parties which
introduced a rule that the central government has to work together with the state
governments. And hence after indepenedence to make a truthful govt, they came together
forming a coalition govt of national and regional parties at the centre and they shaped the
trajectory of having cooperative federalism.

CONSTITUTIONAL POSITION OF CO-OPERATIVE FEDERALISM IN INDIA

Article 1 of the Constitution states India that is Bharat, shall be a Union of States.While the
Constitution doesn’t mention the term federal, it does provide for a governance structure federal
in nature.

o The seventh schedule under Article 246 of the constitution deals with the
division of powers between the union and the states. It contains three lists Union
List, State List and Concurrent List. The union list details the subjects on which
Parliament may make laws while the state list details those under the purview of
state legislatures. The concurrent list on the other hand has subjects in which both
Parliament and state legislatures have jurisdiction. Union and the states are
constitutionally obliged to cooperate with each other on the matters specified in Schedule
VII of the constitution to ensure unity and integrity of India.

Cooperative federalism means that the centre and the states share a horizontal relationship and
neither is above the other. It minimizes friction and promotes cooperation among the various
constituent governments of the federal union so that they can pool their resources to achieve
certain desired national goals. 
Full faith and credit clause which we have incorporated under article 261 of the
constitution is an example of cooperative federalism and it says that full faith and credit
shall be given throughout the territory of India to public acts, records, and judicial
proceedings of the Union and of every state. It means that laws made by one state will be
respected equally by the laws made in another state. For example driving licence issued by
one state is going to be accepted as valid driving licence in another state too. And this is
because full faith and credit clause.

Another example of cooperative federalism which is there right under our constn under
article 263 is Inter state council which is a non permanent constitutional body. It is the
most dynamic platform to discuss policies, strenghthen the centre-state relations and act as
bridge to the trust deficit between the centre and states.

GST intends to transform India into a true economic union, with the aim of One Nation, One
Tax, One Market.  The free movement of goods and services will give fillip to employment
opportunities and give consumers a wider choice and better prices. This economic integration
will not only boost economic growth, but also bind the nation better. Indeed, GST in India in its
conception, enactment and implementation is an example of real co-operative federalism at
work, in tune with the unique character of India – “Unity in Diversity”.

Whenever any state is effected by natural calamity and it becomes impossible for that state
to deal with that situation. In those situations centre offers help to the state. So we can also
see a sense of cooperation b/w states and centre.

COMPETITIVE FEDERALISM
What are the challenges of cooperative and competitive federalism?

The Centre exercises superior legislative powers through residuary and legislative precedence.
These are the powers that the Union enjoys under the Constitution. The States’ legislative
powers have routinely yielded to it. This creates an atmosphere of mistrust between the Centre
and the States.

taxation powers between the Centre and the States is a contentious issue. Most of the disputes
between the Centre and the State on the taxation issues have won by the former due to provisions
of the constitution. Under the GST, the states have forgone some taxation powers like octroi
entry tax, luxury tax, entertainment tax, etc. however, they still retain the power to levy taxes
through panchayats and municipalities. The southern states have been extremely vociferous with
regards the sharing of taxes between the States and the Centre as it is mostly subjected subjected
to the recommendations of the Finance Commission and action by Parliament. However, under
Article 269A(1), the GST Council and not the Finance Commission has the power to make a
recommendation with regards to the sharing of taxes obtained from the inter-state trade. The
States have votes in the GST Council, giving them the power to have their say on tax matters.
However, Articles 270(1)A and 270(2) states that the taxes levied under the GST laws will be
shared in the manner prescribed by the Finance Commission, not the GST Council. This creates
a clash between the roles and powers of Finance Commission and the GST Council.

Administrative relation copy

CHALLENGES COMPETITVE FEDERALISM

The competition between the States is increasing the gap between the developed and under-
developed states. The States like West Bengal, Assam, Bihar, and Orissa are against the
unvarying method of funding because they are economically weaker compared to that of the
other states and they now call for special funds to boost their economic growth and investors’
inflow. These states require assistance from the Centre for their increased participation in the
competitive federalism.

The economic growth and development of India is no uniform in nature. They differ from state
to state. The economically weaker states must not be treated as equals to that of the rich states.
They must be given special attention by the Central government so that they can cooperate with
those state governments for the overall development of the nation. One cannot assume that all
states will perform uniformly by giving them financial independence. Some may lack progress
with regards to the literacy levels, employment rate, etc., while the others may make use of their
already well-developed skilled labour force, capital, infrastructure, etc., to woo the investors into
their jurisdiction. This, in other words, create an uneven economic growth and development of
the nation. Due to the above-mentioned factors, those states that lack economic development are
not able to participate in the competitive federalism.

 Trust deficit between Centre and States is widening. Most state governments believe the
thrust on federalism is limited to lofty ideas and big talks. Many States have shown their
displeasure with the way the Centre has been dealing with the States.
 On one hand the Centre has increased the States’ share of the divisible pool but in
reality States are getting a lesser share. The allocation towards various social welfare
schemes has also come down, affecting the States’ health in turn.
NOW LET US SEE THE COMPARISON BETWEEN THE TWO.

CONCLUSION

The concepts of cooperation and competition federalism seems to be contradictory to each other.
They are two sides of same coin. The competition alone cannot give best results. It is
competition along with cooperation that will drive the real change. To bring competition, the
centre should cooperate with the states by providing necessary autonomy in their policy making
and allocating them the required funds to spend on their own priorities. The cooperation forms
the ground base on which the competition can begin. And hence there should be balance between
cooperative and competitive federalism.