What the article is about:
- The article talks about recent comments about “cooperative federalism” in India by honourable prime minister.
Relevance:
- GS2: Federalism, cooperative federalism, centre- state relations, Inter-state relations.
Analysis:
- At recent meeting of NITI aayog’s governing council meeting PM narendra modi commented that country’s federal structure, shaped by “cooperative federalism” had emerged as a “model for the world”.
Cooperative federalism:
- Cooperative federalism, also known as marble-cake federalism, is defined as a flexible relationship between the federal and state governments in which both work together on a variety of issues and programs.
Sore points between union and states in recent times:
- The Covid vaccination programme, where during the early days of second wave, centre shifted the burden of procurement and distribution of vaccine onto the states.
- Disagreement on GST compensation fund between states and union.
GST compensation fund:
- The Centre promised compensation to the States for any shortfall in tax revenue due to GST implementation for a period of five years. This promise convinced a large number of reluctant States to sign on to the new indirect tax regime.
- As per the GST Act, states are guaranteed compensation for any revenue shortfall below 14% growth (base year 2015-16) for the first five years ending 2022. GST compensation is paid out of Compensation Cess every two months by the Centre to states.
Instances where cooperative federalism has been evident:
- Union helped ease the financial stress on state owned power distribution companies.
- On GST, all decisions are taken by council where states can openly voice their concern, and put for their demands.
Way forward:
- At this critical juncture in centre- state relations, it in incumbent upon both to widen spaces for dialogue and negotiation.
