India’s Cooperative Federalism: Challenges, Reforms, and the Road Forward

1. Definition of Cooperative Federalism (CF)

Cooperative Federalism refers to a governance model in which the Union and State governments work together, sharing responsibilities, resources, and decision-making to achieve common national objectives while respecting the autonomy of states. It contrasts with competitive or coercive federalism, emphasizing collaboration over conflict. In India’s constitutional framework, CF is rooted in the idea that federalism is not a separation but a partnership—essential for a diverse and populous nation.

2. Cooperative Federalism and Democracy

Cooperative federalism embodies a balanced sharing of powers between the Centre and States—reinforcing democracy by accommodating diversity and local autonomy. Unlike confrontational models, CF enables collaborative policymaking, fostering joint responsibility and mutual trust across Governments.

3. Federal Structure as vital for Democracy

A vibrant federal structure is critical to Indian democracy:

• It accommodates diversity—linguistic, cultural, and institutional.
• It delivers responsive governance—local solutions to local problems.
• It preserves democratic checks and balances, preventing central overreach.
• It strengthens political legitimacy through inclusion in policymaking and governance.

4. One Nation One Election Push & “Double-Engine Government” Slogan

The idea of One Nation One Election and the political slogan of a Double-Engine Government (same party ruling at both Centre and State) underscore political attempts to streamline governance and reduce electoral cycles. However, critics argue they can undermine CF by prioritizing uniformity or central dominance over regional representation and autonomy.

5. GST as a Centre–Favour Arrangement

The GST Council is hailed as a prime example of CF, involving both Centre and State representatives in consensus-based taxation decisions. In its early phase, unanimous decisions across 27 meetings established a cooperative model for tax reform and fiscal coordination. Yet, as a “Centre-favour arrangement,” it can risk central leverage over states’ fiscal space.

6. States at the mercy of the Centre

Despite institutional CF structures, reality often paints a different picture. Some analysts argue that India’s asymmetric federalism disproportionately empowers the Centre, reducing State autonomy and making them implementers of central schemes rather than partners in policy.

7. Local Self-Governments are on the downfall

Local Governance (Panchayati Raj Institutions (PRIs) and Urban Local Bodies (ULBs)) bears the brunt of power centralization. For example:

• In Karnataka, Gram Panchayats have seen administrative powers erosion—facing bureaucratic hurdles for basic service.
• Nationwide, the devolution of fiscal and administrative powers remains limited. Panchayats rely heavily on grants rather than raising their own revenue—creating a “dependency syndrome”.
• ULBs are weak; they lack autonomy and function more as instruments of state control rather than democratic institutions.

These trends demonstrate an erosion of grass root autonomy and a weakening of democratic decentralization.

8. Other important issues of Cooperative Federalism

a) NITI Aayog’s Role

NITI Aayog was envisioned as a central platform to foster CF by aligning State and Union priorities through policy dialogues, technical support, and best-practice exchange. Programs like Aspirational Districts and SATH focus on shared development outcomes (niti.gov.in).

b) Finance Commissions & transfers

The 14^th and 15^th Finance Commissions brought reforms to intergovernmental transfers, encouraging State fiscal autonomy and strengthening State Finance Commissions and Panchayats—though their impact remains uneven (fincomindia.nic.in).

c) Devolution Index

The Devolution Index is a composite measure used to assess the extent and effectiveness of power, functions, finances, and authority transferred from higher levels of government (usually the central or state government) to local self-governments, such as PRIs and ULBs.  It essentially tracks how much actual autonomy local bodies have in governance and service delivery, not just on paper but in practice.

The Devolution Index ranks Karnataka (72.23), Kerala (70.59), and Tamil Nadu (68.38) highest in terms of framework, finances, functions, capacity, and accountability—highlighting disparities across States in actual devolution (Decentralization Net).

9. Suggestions to improve Cooperative Federalism

1. Enhance Fiscal Devolution: Strengthen State Finance Commissions and ensure predictable, formula-based funding to PRIs and ULBs.
2. Empower Local Institutions: Legislatively reinforce the autonomy of PRIs and ULBs—ensuring functions and revenue rights are respected.
3. Expand Participatory Governance: Empower Gram Sabhas and urban citizen forums with genuine authority over local development and budgeting.
4. Promote Institutional CF Mechanisms: Revitalize forums like the GST Council, NITI Aayog, and Inter-State Councils to resolve conflicts and coordinate policy.
5. Strengthen Monitoring & Accountability: Regular performance audits of transfers and schemes to ensure transparency and reduce dependency.
6. Support Capacity Building: Provide training and technical support to local bodies to manage finances, execute projects, and deliver services effectively.

10. Concluding remarks

Cooperative Federalism is not just a governance system—it sustains the democratic ethos by balancing power, ensuring regional representation, and nurturing grassroots autonomy.

India has institutional tools—GST Council, NITI Aayog, Finance Commissions—but these require proper functioning, respect for federal spirit, and political commitment. Local governance must be strengthened, fiscal autonomy reinforced, and intergovernmental cooperation institutionalized.

Only then will India’s federal structure remain a true pillar of democracy—dynamic, inclusive, and resilient.

Abbreviations

• CF – Cooperative Federalism
• GST – Goods and Services Tax
• NITI – NITI Aayog
• PRI – Panchayati Raj Institution
• ULB – Urban Local Body

UT – Union Territory