By Pradeep S Mehta
A balance between competition and cooperation is called for, with some States balking at an excess of the former
Ever since the Modi government assumed office, the chant of ‘cooperative federalism’ has grown louder. First, the Cabinet resolution on the creation of the National Institution for Transforming India (NITI) Aayog spelt it out and 40 days later the e-book on the new body reiterated the same. The sudden entry of competitive federalism in the government document seems like a crucial afterthought.
The Modi government has been talking about competitive federalism, but without saying so in as many words. The NITI Aayog e-book talks of competitive federalism as a force multiplier to achieve the objective of cooperative federalism.
It explains that competitive federalism will manifest in the Centre competing with the States and vice-versa, and the States competing with each other in the joint pursuit of national development.
But to a layman, cooperation and competition are seemingly antithetical elements and it’s not clear how they can coexist.
Perhaps it is time to open the discussion on what actually these two forms of federalism may entail and if at all they can be steered together effectively by the NITI Aayog.
A disciplinary force
As a concept, competitive federalism is more suited to countries such as the US. Over 30 premier think tanks in the US endorse it. Its proponents claim that it’s woven into the DNA of the American constitution and America’s greatness. The meaning of competitive federalism as espoused by the Liberty Foundation in the US would entail a system that allows States to compete with each other over a broad range of issues to provide citizens with the best value goods and services at the lowest cost.
It serves as a barrier to centralisation and requires States to reform their programmes and provide goods and services that they can self-fund.
In other words, one-size-fit-all policies render meaningful competition amongst States to a few issues, going against the very grain of competitive federalism . Other experts elsewhere seem to concur. For instance, Judge Carlos Bea of the United States Court of Appeals feels competitive federalism indeed disciplines the States.
A good bargain
The Modi government seems to be conveying the same thing. In fact, two lines in the Prime Minister’s letter to State chief ministers after accepting the recommendations of the 14th Finance Commission puts it all in perspective: “…we also believe that States should be allowed to chalk out their programmes and schemes with greater financial strength and autonomy, while observing financial prudence and discipline”. Read More >>
The writer is the secretary general of CUTS International. Co-written by Abhishek Kumar of CUTS International Public Policy Centre.
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