Cooperative federalism: Myth or reality.

Partners Who Quarrel

The year 2016 told two stories about Indian federalism. In August and September, state legislatures run by rival parties lined up to ratify the constitutional amendment that created the Goods and Services Tax, and in doing so they pooled one of the oldest marks of sovereignty, the power to tax, into a shared council. In the same year, the Supreme Court restored elected governments that the Union had displaced: in Uttarakhand it ordered a floor test that brought Harish Rawat back to office, and in Nabam Rebia it undid the Governor's manoeuvres that had toppled the Arunachal Pradesh ministry. One story spoke of partnership, the other of suspicion. Which one is true? Cooperative federalism in India is neither a myth nor a settled reality; it is a constitutional possibility that becomes real only when institutions bind the Union and the States into shared decisions, and slips into myth whenever one side treats the other as a subordinate.

The idea must first be decoded. Cooperative federalism describes a system in which the Centre and the States are not rivals guarding sealed compartments but partners pursuing common goals through negotiation and joint institutions. Granville Austin called the Indian Constitution an example of exactly this kind of federalism, while K.C. Wheare described it as quasi-federal, a unitary state with subsidiary federal features. Dr B.R. Ambedkar told the Constituent Assembly that the Constitution could be both unitary and federal according to the requirements of time and circumstances. The framers, writing amid Partition and the integration of princely states, deliberately built a strong Centre: residuary powers with the Union, a single citizenship, the All India Services, and emergency provisions. The question is whether, within that design, cooperation has taken root.

There is solid evidence that it has. The GST Council under Article 279A is the most striking federal institution India has built: the Union holds one third of the votes and the States together two thirds, so neither can impose its will alone. In Mohit Minerals (2022), the Supreme Court held that the Council's recommendations are persuasive rather than binding, reminding both sides that the Council works by consensus, not command. Fiscal transfers also moved in the States' favour when the Fourteenth Finance Commission raised their share of the divisible pool to 42 percent for 2015 to 2020. The Planning Commission, which once handed down plans from Delhi, gave way in 2015 to the NITI Aayog, whose Governing Council seats every chief minister at the table.

Moreover, cooperation has shown itself most clearly in crises and in development. During the pandemic, the Union and the States ran the world's largest vaccination drive through a shared digital platform and state health systems. The Aspirational Districts Programme, launched in 2018, ranks districts on health, education and other indicators, and has turned what might have been central direction into a contest among districts to improve. The zonal councils and the Inter-State Council under Article 263, set up in 1990 on the Sarkaria Commission's advice, give States a formal voice. Indicators such as the NITI Aayog's SDG India Index add a healthy dose of competitive federalism, where states learn from each other rather than merely compete for central favour.

Yet the other story is equally real. Article 356 was used again and again, often against governments run by rival parties, until the Supreme Court, in S.R. Bommai (1994), declared federalism part of the basic structure and made a floor test, not a Governor's report, the proper measure of a majority. Even after Bommai, the office of the Governor remains the sharpest point of friction. Governors have sat for long periods on Bills passed by elected legislatures in Tamil Nadu, Kerala and Punjab, forcing state governments to seek relief from the Supreme Court. When a constitutional head who is meant to be a bridge becomes an agent of one side, the language of partnership rings hollow.

Fiscal federalism tells a similar tale of give and take. The States surrendered much of their own taxing power to GST and rely on the Union for a large share of their revenue, yet cesses and surcharges levied by the Union fall outside the divisible pool and are not shared with them. The end of GST compensation in 2022 left several States with a revenue gap. Centrally sponsored schemes often come with uniform conditions and branding that leave little room for local design. Kerala's suit against the Union over its borrowing limits, which the Supreme Court referred to a Constitution Bench in 2024, shows that some States now see the courtroom, not the council room, as the place to settle money matters.

Political and administrative tensions deepen the doubt. Several States have withdrawn their general consent for the CBI to investigate within their territory, and the use of central agencies against opposition leaders has become a recurring complaint. Southern States worry that a fresh delimitation based on population would reward States that failed to control growth and penalise those that succeeded. Inter-state disputes over river water, from the Cauvery to the Sutlej-Yamuna Link canal, show that cooperation among the States themselves is often as weak as cooperation with the Centre. In each case, the trouble is not the absence of institutions but the absence of trust within them.

A fair reading, then, is that cooperative federalism is real in its architecture and uneven in its practice. Where an institution forces shared decisions, as the GST Council does, cooperation happens even among bitter political rivals. Where power is discretionary and unshared, as with the Governor's office, central agencies or cesses, suspicion grows. Germany offers a useful contrast: its Bundesrat gives the Länder a direct role in national law-making, so cooperation is built into the legislature itself. India's Rajya Sabha was meant to be a council of States, but party discipline has largely turned it into a second chamber of national parties.

The remedy, therefore, lies in turning goodwill into rules. The Sarkaria Commission of 1988 and the Punchhi Commission of 2010 both recommended that Governors be chosen in consultation with chief ministers and that Article 356 be a last resort. The Inter-State Council should meet regularly and become a standing forum for policy, not an occasional ceremony. Cesses and surcharges could be capped or brought within the divisible pool, and centrally sponsored schemes could give States flexible funds to design for local needs. A permanent mechanism for river disputes and a consensus-based approach to delimitation would remove two of the most combustible issues from partisan politics.

The Draft Constitution can be both unitary as well as federal according to the requirements of time and circumstances.

Ambedkar's words were a design choice, not a loophole. India's federalism was built to flex, centralising in war and emergency, devolving in peace and prosperity. The danger lies only when the flex becomes permanent and partnership becomes hierarchy. Cooperative federalism becomes a reality not when the Centre and the States agree on everything, but when they disagree within institutions they both trust. The GST Council of 2016 and the Bommai judgment of 1994 together show the way: shared institutions that bind, and courts that protect the floor. If India builds on both, the federal bargain will not be a myth to be debated but a partnership that carries Team India towards a developed nation by 2047.