Case Laws T.N. Cauvery Sangam v. Union of India 1990 AIR 1316 Dabur India Limited v.

v. State of Uttar Pradesh 1990 AIR 1814 State of Rajasthan v UOI 1977 AIR 1361 S.R. Bommai v Union of India AIR 1994 SC 1918 ADM JABALPUR v SHIVAKANT SHUKLA AIR 1975 State of Haryana v State of Punjab (2002) Shamsher Singh v State of Punjab 1974 AIR 2192 Kesavananda Bharti v State of Kerala AIR 1973 SC 1461 D.C. Wadhwa v State of Bihar 1987 AIR 579 MC Mehta v Kamal Nath

CO-OPERATIVE FEDERALISM INTRODUCTION Seeds of cooperative federalism can be traced right from the Regulating Act of 1773 which set up a system whereby the British Government supervised (regulated) the work of the East India Company but did not take power for itself. The Government of India Act, 1919 provided for a federal India, however superficial, by envisaging a dual form of government called dyarchy. The Report of the Indian Statutory Commission of 1929 gave a federal solution by proposing to introduce dyarchy at the centre and to advance from diarchy to fully responsible government in the provinces. The same was sought to be achieved by the Government of India Act, 1935. In 1937, after a great deal of confrontation, Provincial Autonomy commenced. From that point until the declaration of war in 1939, Lord Linlithgow tirelessly tried to get enough of the Princes to accede to launch the Federation. The Cabinet Mission of 1946 provided that Union of India should deal with Foreign Affairs, Defence and Communication and all subjects other than Union subjects and all residuary powers were to vest in the Provinces. The Government of India Act, 1919 laid down the foundation of a federal form of government in India. It introduced diarchy in India. A federal structure results in the division of powers between the center and the units. The Government of India Act, 1935 also laid down the provisions for a federal form of government in India. It provided for the distribution of legislative powers between the union and the provinces. The Government of India Act, 1935, further provided for the cooperative relationship between the provinces. Provisions were laid down to promote harmony and to resolve the differences between the various provinces.

Sections 131, 132 and 133 of the Government of India Act, 1935 laid down provisions for resolving the disputes related to waters. These dealt with the problems relating to inter Province Rivers and river valleys. Section 135 of the Government of India Act, 1935 laid down provisions for the creation of councils dealing with the coordination between the various provinces of the British India. The need for creating a cooperative relation between the provinces was felt even before the independence. The Government of India Act, 1935 laid down the foundation for the creation of a cooperative relationship in the federal structure. The present Constitution has elaborated the principles which were laid down under the Act. Division of powers between the federation and the union where they are given ordinate and equal status with their respective field is known as coordinate federalism. Where the units and the federation do not for a power but co-operate through various instrumentalies to promote the common purpose is known as co-operative federalism. Dr Vijay Kelkar, Who better than Dr Kelkar who headed the 13th Finance Commission. The speech is full of insights: While describing federalism, people have described it in many ways. For instance, some scholars have described federalism as administrative federalism; some have argued for market preserving federalism and some others have described it as coming together federalism vs. holding together federalism. Countries like USA are supposed to be examples of coming together federalism while India is supposed to be an example of holding together federalism. In my view, the important feature of Indian federalism is what in India we call the cooperative federalism feature with formal and informal rules for

maintaining the political system as well as for the peaceful change management. This is the feature that gives the flexibility to our Federation. I think that it is this flexibility which helped the country to maintain unity while strengthening the democracy and I do believe that the democracy is one of the deep determinants of Indias growth performance. The U.S. constitution, over its 200 years or more of existence, has been amended only 27 times while in India, we have amended the Constitution 94 times in the first sixty years. In my view, this is the strength and not weakness of our system. INDIAN FEDERALISM AND COALITION POLITICS The Lokpal Bill has exposed the innerside of party politics in India. During the winter session the Lokpal and Lokayukta Bill was introduced in the Lok Sabha. For the introduction of the Bill there was visible pressure of the 'Anna Team' and the 'Fast Politics' had decided the party and public opinion in the country. Anna's demand was for a strong Jan Lokpal to root out corruption in the different layers of the decision making system. After prolonged discussion between the Standing Committee and the Anna Team the Lokpal issue became the most heated and hated controversy. The Congress leadership of the UPA group wanted a constitutional status for Lokpal for which amendment of the Constitution was a necessity. The Bill also had a component for the institution of Lokayukta for the states, over which the coalition nature of the Indian politics found its bitterest outburst in both the debates held in Lok Sabha and Rajya Sabha. The Trinamul Congress of UPA and BJD were most critical over the Indian Parliament's attempt to subvert the federal balance in the Constitution. The Congress leadership took shelter under the provision available in the Legislative relation between Union and the states to give effect to international agreements. The voice of the states was echoed by the BJP who wished the Bill to be discussed under some other provision which was a dilatory move to put

the Indian Federalism and Coalition Politics Prof. Surya Narayan Misra Congress into an embarrassing situation for not passing the Lokpal Bill. The politics crossed all its limits in Rajya Sabha and the inevitable happened. In the name of Federal structure, principle and balance the coalition politics in the country forgot all kinds of Constitutional principles and proprieties. In this background it has become necessary to have a fresh look at the structure, nature and compulsions of the Indian federal system. The one-party dominant era could consume the Central dominance and we toyed with the idea of 'Cooperative Federalism'. But the electoral dynamics of the country and the new political compulsions appeared after the fourth general elections of 1967 exposed the tension areas of the Indian federal system. The DMK government in Tamilnadu, Left Front in West Bengal and other nonCongress dispensations raised the bogey of 'Fiscal imbalance', 'central misrule', 'politics of planning', 'impartial governor' and 'fair deal to the States' etc. These could not disturb the political balance till the Congress had majority and there was lack of understanding among the non-Congress Opposition Parties. The first non-Congress government at New Delhi attempted to have a re-look at the Federal system but it could not achieve success. During the Janata Party rule at the Centre the rise of new regional parties and the existing tirade against central dominance could experience the demand for autonomy by the States like West Bengal, Tamilnadu, Punjab, J & K etc. Again the political scenario in the country was changed in 1989. This ushered in the Coalition era in the Indian politics. The political map of the country was drastically changed and Congress had a symbolic presence with only 30 % of the country under its political control. The beginning of 1990s could experience the Constitution of Inter-state Council under Article-263 for the first time. Some of the political allegations of use of electronic media and Election Commission also found a positive climate

for discussion at the national level. This could see the Prasar Bharti Act and multi-member election commission in operation later COOPERATIVE FEDERALISM UNDER INDIAN CONSTITUTION With the passage of time, however the concept of competitive federalism slowly gave way to co-operative federalism. There has been a felt need for a change from competitive to cooperative relationship in the working of the federal constitution. Cooperative federalism means that the center and the states share a horizontal relationship and neither is above the other. This trend has been promoted by three factors: (1) The exigencies of war when for national survival, national efforts takes

precedence over fine points of Centre state division of powers; (2) Technological advances mean making of communication faster; (3) The emergence of the concept of social welfare state in response to public demands for various social services involving huge outlays which the governments of the units could not meet by themselves out of their own resources. The concept of cooperative federalism helps the federal system, with its divided jurisdiction to act in unison. 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. The Constitution of India provides various provisions dealing with the cooperative aspect of federal structure. The constitution makers deliberately provided for such features in the constitution in order to ensure the smooth working of the government.

Full Faith and Credit Clause (Article 261) Article 261 of the Constitution of India provides that full faith and credit shall be given throughout the territory of India to all the public acts, records and judicial proceedings of the Union and of every State. This is a step to promote cooperation and faith between the center and the states. Clause (2) empowers the Parliament to lay down by law the mode of proof as well as the effect of acts and proceedings of one state in another state. According to clause (3), final judgments or orders delivered or passed by civil courts in any part of the territory of India can be executed anywhere in the country according to law. The full faith and credit clause promotes uniformity and unity throughout the territory of India. It develops a sense of harmony and unity in the country. It promotes cooperation between the states and the center and gives due credit to all the public acts. River water Disputes (Article 262) Article 262 empowers the Parliament to provide by law for adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of any interstate river or river valley. A river board may be established by the Central government for advising the governments interested in relation to matters concerning the regulation or governance of an inter State river or river valley. Inter State Council (Article 263) Article 263 provides that the President may by order appoint an Inter state Council if it appears to him that public interest would be served by its

establishment. The President may define the organization, procedure and duties of the Council. In T.N. Cauvery Sangam v. Union of India1, the Supreme Court has held that once the Central government finds that the dispute referred to in the request received from the State government cannot be settled by negotiations, it becomes mandatory for the central government to constitute a tribunal and to refer the dispute to it for adjudication. Further, if the central government fails to make such a reference, the court may, on an application under Article 32 by an aggrieved party issue mandamus to the central government to carry out its statutory obligation. Sarkaria commission on Centre state relations has strongly recommended for the establishment of an inter state council to effect coordination between states. In Dabur India Limited v. State of Uttar Pradesh 2(1990), the Supreme Court suggested the setting up of a council under Article 263 to discuss and sort out problems of central state taxation. Zonal Councils Zonal Councils have been introduced in India by the States Reorganisation Act, 1956. These councils have been created in order to bring the states of a particular region in close conformity with each other. The Zonal Councils were created as an instrument of intergovernmental consultation and cooperation mainly in socio economic fields and also to arrest the growth of controversies and particularistic tendencies among the various States. There exists five Zonal Councils:

1 2

1990 AIR 1316 1990 AIR 1814

(1) Northern- comprising of the states of Punjab, Haryana, Himachal Pradesh, Rajasthan, Jammu and Kashmir and the union territories of Delhi and Chandigarh. (2) Eastern- comprising of the states of Bihar, West Bengal, Orissa and Sikkim. (3) Western- comprising of the states of Gujarat, Maharashtra, Goa and the union territories of Daman and Diu and Dadra and Nagar Haveli. (4) Central- comprising of the states of Uttar Pradesh and Madhya Pradesh (5) Southern- comprising of the states of Andhra Pradesh, Tamil Nadu,

Karnataka and Kerala and the union territory of Pondicherry. Each State included in a zonal council enjoys a complete equality of status as: (1) Each state has an equality of representation in the council; (2) Each Chief Minister is to act as the Vice chairperson of the council in rotation for a year; (3) Meetings of the council are to be held in each member state by rotation; (4) The Chief Secretary of a member state is to act as the Secretary of the council in rotation for one year. A zonal council is an advisory body and has no executive or legislative function to perform. Planning and Finance Planning makes inter-governmental cooperation very necessary for in a federal structure, the governments are not arranged hierarchically. The Directive Principles of state Policy emphasize towards economic democracy, economic empowerment of the weaker sections of the society, and a welfare state without

which political democracy does not have much meaning for the larger section of the poor people in the country. In 1950, the Government of India set up the Planning Commission with the Prime Minister as its chairman. It has a vice president and a few central ministers and a few non official experts as its members. It has been assigned the following functions: (1)to make an assessment of material, capital and human resources of the country and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nations requirements; (2) To formulate a plan for the most effective and balanced utilization of the countrys resources; (3) On a determination of priorities, to define the stages in which the plan should be carried out and propose the allocation of resources for the due completion of each stage; (4) To indicate the factors which are tending to retard economic development and determine the conditions which in view of the current social and political situation, should be established for the successful execution of the plan;

(5) To determine the nature of the machinery which will be necessary for securing the successful implementation of each stage of the plan in all its aspects? (6) to appraise from time to time the progress achieved in execution of each stage of the plan and recommend the adjustments of policy and measures that such appraisal might show to be necessary; and

(7 to make such interim and ancillary recommendations as might on a consideration of the prevailing economic conditions, current policies, measures and development programmes, or on an examination of such specific problems as maybe referred to it for advice by the Central or State governments. National Development Council The National Development Council was established in 1952 in order provide a mechanism to give sense of participation to the states in the planning processes. It consists of the Prime Minister, the State Chief Ministers, and representatives of the Union Territories and members of the Planning Commission. In 1967, its membership was enlarged by the addition of all members of the Union cabinet and Chief Ministers of the Union Territories. The functions of the council are to strengthen and mobilize the efforts and resources of the nation in support of the plans; to promote common economic policies in all vital spheres and to ensure the balanced and rapid development of all parts of the country. The council reviews the working of the plan from time to time, considers important questions of social and economic policy affecting national development, and recommends measures for the achievement of the aims and targets set out in the national plan. The Sarkaria Commission has suggested that it should be renamed as National Economic and Development Council and be constituted under Article 263. Other Bodies (a) University Grants Commission: The University Grants Commission was created under the University Grants Commission Act, 1956. It gets its funds from the center only. It grants fund both for maintenance and development to central universities while only for maintenance to state universities.

(b) Other bodies to coordinate higher education: The Indian Medical Council, created under the Indian Medical Council Act, 1956, the All India Council for Technical Education, formed under the All India Council for Technical Education Act, 1987 are some of the bodies regulating and coordinating higher education in India. (c) Damodar Valley Corporation: The Damodar Valley Corporation is the joint enterprise of center and the states of Bihar and West Bengal and has been established under the provisions of Article 262 to develop the inter state valley of the Damodar river for irrigation, power and flood control. (d) Drugs Consultative Committee: Section 7 of the Drugs Act, 1940, empowers the Central Government to constitute the Drugs Consultative Committee to advise the central and state governments on any matter tending to secure uniformity throughout India in the administration of the Act. The committee consists of two representatives of the central government and one representative of each of the state governments. Working of cooperative federalism in India- analysis The planning commission is very instrumental in providing funds and grants to the states for the purpose of carrying on the centres development plan s. The grants are given under the provisions of Article 282. These grants are provided for the implementation of the centres programmes in the states and are an effective mode of controlling the states by the center. The States want greater grants from the center but are unwilling to participate in increasing their funds by taxation. All the states want to increase their shares of grants but do not want to take any responsibility. It is required that the richer states have a greater share in raising fund. Further, the grant of funds by the center to the states is politically motivated and the center tends to promote some states over the others. The states blame

the center for not providing adequate funds for the purpose of carrying on various developmental programmes. There are various conflicts regarding the sharing of river water. States do not want to help the other water deficit states and there is requirement to make the states to act for the overall benefits of the country and not act for their individual interests. As the Zonal Councils are only advisory bodies, they have not achieved much. The Sarkaria Commission has expressed that the Zonal Councils have not been able to fulfil their aims and objectives. It recommended that these should be reactivated and appointed under the provisions of Article 263 to give them a constitutional status. With a greater authority, the Zonal Councils will be able to achieve more. Position in other federations The exigencies of war and financial crisis have led to the development of cooperative features in all the federal constitutions. A strong cooperative relationship ensures that the nation is unified despite its federal nature. In U.S.A., the intergovernmental cooperation has been built mostly around the system of conditional central grants to the states for centrally sponsored schemes. The Constitution of USA also provides for the inter-governmental tax immunities between the center and the states. In Australia, financial difficulties of the state lead to the creation of Commonwealth Grants Commission as well as the Australian Loan Council in 1927. The council comprises of the Prime ministers of center and states and meets once a year. This arrangement has reduced competition among the governments for funds. Further, expedients like conditional grants, loans by the center to the states, income tax sharing between the center and the states with

accent on state financial needs, have also come to be adopted to promote intergovernmental cooperation. In Canada also, cooperative techniques like Central grants to provinces, delegation of power by the center to the provinces, referential legislation have been developed. Thus, a cooperative relationship, in which the two powers are horizontally arranged instead of hierarchically, has become a rule in all the federations as it leads to the most productive outcome. In a vast country like ours, the spirit of co-operative federalism should guide the relations between the Centre and the States on the one hand, among different States and between the States and the Panchayati Raj Institutions (PRIs) and the Urban Local Bodies (ULBs) on the other. The essence of co-operative federalism is that the Centre and the State Governments should be guided by the broader national concerns of using the available resources for the benefit of the people. Co-operative federalism encourages the Government at different levels to take advantage of a large national market, diverse and rich natural resources and the potential of human capabilities in all parts of the country and from all sections of the society for building a prosperous nation. Co-operative federalism makes it possible to raise all the available resources by the Government at different levels in a co-ordinated way and channel them for use for the common good of the people. This requires a harmonious relationship and co-operative spirit between the Centre and the States and among the States themselves. While a healthy competition among the States for evolving efficient and socially desirable policies and programmes is welcome, any competition which nullifies each other's advantages in development and erodes the resource base of the States should be avoided. Co-operative federalism is intended to ensure a

minimum bundle of basic services and a nationally acceptable level of living for all the people of the country. CENTER-STATE RELATIONS The relations between the Centre and the States in political, economic, financial and administrative spheres have been periodically reviewed. The Administrative Reforms Commission and the Sarkaria Commission were appointed to review the whole gamut of relations between the Centre and the States and to recommend measures, including changes in the Constitutional provisions, to harmonise the relationship between the Centre and the States. While the Government has accepted and implemented several recommendations of the Administrative Reforms Commission, the recommendations of the Sarkaria Commission are under consideration in the Inter-State Council (ISC) which is trying to reach a consensus on various issues. Out of the 247 recommendations of the Sarkaria Commission, the Inter-State Council has taken a decision on 91 recommendations. These recommendations pertain to All India Services, Administrative Relations, Deployment of Union Armed Forces, Agriculture, Forest, Food, Civil Supplies, Mines & Minerals, Trade, Commerce, Mass Media etc. The re-activisation of ISC has opened a new chapter in the Centre-State relations and provided a useful forum for building a common national approach on various issues. MOBILISATION AND SHARING OF RESOURCES The sphere of financial relations between the Centre and the States has been the most difficult one and despite continuous efforts, unanimity has not been reached on various issues involved. The issues, which have a bearing on resource availability, need careful analysis and discussion. The Sarkaria Commission had paid enough attention to the issue of financial relations between the Centre and the States and had made a large number of

recommendations in this regard. These are being considered by the Inter-State Council and its Standing Committee. Essentially, the problem of resource availability, which affects both the Centre and the States, can be overcome only if there are greater efforts to tap the resource potential both at the level of Central Government as well as at the State Governments. Unless the resource availability of the Central Government improves, it may not be possible to channelize a larger quantum of Central assistance or to increase the grant component to the States. The Government of India has recently agreed to a share of 29% to the States in the total gross revenues from all the Central taxes with effect from April, 1996. This will increase the flow of funds in absolute terms on non-Plan account. With this increased share of the States in the total devolution, the States would be in a position to benefit from the revenue buoyancy from all the taxes levied by the Centre. While the share of 29% of the net yield from all Central taxes has not satisfied all the States, the decision itself marks a watershed in the approach to the sharing of tax revenues of the Centre, because the sharing which was so far limited to two taxes, viz., Excise and Income Tax, will now include all Central taxes. In other words, the divisible pool of Central taxes has been broadened by implementing the Alternative Scheme of Devolution recommended by the Tenth Finance Commission. Notwithstanding such a widening of the divisible pool of Central taxes, the financial needs of the States will increase during the Ninth Plan because of the large gaps which remain in the field of BMS and infrastructure. Therefore, the States need to raise more of their own resources to meet such increased outlay. In order to improve the resources of the States and to enable them to raise the required level of resources for Plan purposes, the Centre has to play some supportive role in certain specific areas. These areas relate to statutory devolution of funds from the Centre to the States through Finance Commission,

discretionary grants and loans through Planning Commission, revision of royalty rates once in two years and application of these rates on ad valorem basis, helping the States to move towards a uniform tax structure and Modvat with the possibility of imposing Consignment Tax in the interim period. The Central Government has already constituted the Central Electricity Regulatory Commission under the Electricity Regulatory Commission Act, 1998. Some of the States have also set up their own State Electricity Regulatory Commissions which, inter alia, provide for unbundling and corporatisation of State Electricity Boards, fixation of electricity tariff and introducing competition. Many other States are in the process of setting up their own Electricity Regulatory Commissions in due course. All these steps are expected to improve the financial health of the State Electricity Boards which would result in increased size of State Sector Plan Outlay. INTER-STATE RELATIONS Harmonious and cooperative relations between different States are as important as that between the Centre and the States for the healthy functioning of our federation. Various problems have been cropping up in inter-State relations from time to time. On the one hand, there are problems like increasing competition among the States and on the other; there are disputes over sharing of river water etc. Industries, the competition among the States for attracting industries and other economic activities by offering incentives has intensified. While a healthy competition among the States for providing better and efficient services is to be welcomed, the practice of granting tax rebates and subsidies need to be seen in the right perspective of whether they lead to national welfare. Instances are not lacking where the States have joined a sort of a race in granting sales tax and other rebates for attracting new industrial units. This has affected the resource

position of the concerned States without commensurate benefits, because in so far as the same concessions are allowed by a number of States, these concessions do not remain the main guiding factor for the location of an industry and other important considerations like efficiency of services and infrastructure facilities may become more important. Similarly, often there is a tendency on the part of the States to allow tariff concessions to various sections. Power tariff is a case in point and many States have been supplying power to various sectors at a price much lower than the cost of generation. A national consensus had evolved at the Chief Minister's Conference for fixing the minimum tariff for agriculture and to move over to a regime of fixing tariffs for recovering the costs. Some States have, however, gone against this consensus and allowed free electricity to agriculture sector. This has not only put the financial condition of the State Electricity Boards in a precarious position but also created problems for the neighbouring States where vociferous demands have been made for similar concessions. Populist measures have a tendency to spread because once they are granted by one State, pressure builds up in the neighbouring States for allowing the same concessions. Similar is the position regarding the administrative charges for other services like irrigation and water. Despite various Commissions recommending minimum rates for such services, so that at least O & M costs are recovered, many States have not implemented these recommendations, depriving them of an important source of revenue and putting their financial position under great strain. It is essential to have a national consensus regarding such issues like harmonisation of tax structure, minimum tariff for certain services, cap on the level of subsidies and facilitation of inter-State trade flows. It is necessary that all the States should fall in line for implementing mutually beneficial policies.

COOPERATIVE FEDERALISM AND JUDICIARY A former Justice of the Supreme Court of India, Justice Khanna, well known for his dissent in the Habeas Corpus case3, has suggested that India was perhaps the first polity to adopt a model of cooperative federalism. This he defined as "the practice of administrative cooperation between general and regional governments, the partial dependence of the regional governments upon payments from the general governments and the fact that the general governments, by the use of conditional grants, frequently promote developments in matters which are constitutionally assigned to the regions" The Judiciary has used numerous phrases to describe this concept of cooperative federalism, though all of them, in essence, have the same meaning. In State of Rajasthan v UOI4, (1977), it was quoted that according to Granville Austin, the Constitution of India was perhaps the first constituent body to embrace from the start what A.H. Birch and others have called cooperative federalism. Chief Justice Beg called the Constitution amphibian,....If then our Constitution creates a Central Government which is amphibian, in the sense that it can move either on the federal or on the unitary plane, according to the needs of the situation and circumstances of a case.... In S.R. Bommai v Union of India 5(1994), the phrase pragmatic federalism was used. In the words of Justice Ahmadi, ....It would thus seem that the Indian Constitution has, in it, not only features of a pragmatic federalism which, while distributing legislative powers and indicating the spheres of governmental powers of State and Central Governments, is overlaid by strong unitary features...

3 4

ADM JABALPUR v SHIVAKANT SHUKLA AIR 1975 1977 AIR 1361 5 AIR 1994 SC 1918

In State of Haryana v State of Punjab (2002), semi federal was used. And in Shamsher Singh v State of Punjab 6(1974), the Constitution was called more unitary than federal. INDIAN CONDITIONS REGARDING COOPERATIVE FEDERALISM Mrs Indira Gandhi humbled the Congress machine, re-established the supremacy of the parliamentary party over the party organisation, broke the power of state Chief Ministers, and established a new balance or rather, imbalance between the Centre and the States. And her personality cult slowly converted Congress into a coterie party. The Congress Government at the Centre further increased its powers vis-a-vis the states by allotting large funds mainly for centrally sponsored development projects. These were the projects that were to be implemented in the states but administered by the centre. All this however could not stop the formation of new parties which were born outside the Parliament, based on ideology, like the DMK in Tamil Nadu, Telgu Desam in Andhra Pradesh and Communist Party in Bengal. Playing with the countrys inherent federal spirit can be a double edged weapon. The very policies of centralisation, politicisation and dictatorship that damaged the federal and democratic structure of the country, led to the rise of a strongly ideological party on the right i.e. the BJP and a mildly ideological combine on the Left. In 1969, Chief Ministers of Andhra Pradesh, Orissa and Kerala met at the Chief Ministers Conference as they were dissatisfied with the issue of centre state relations. In the 1970 Conference, the then CM of Maharashtra challenged the very competence of Planning Commission to set norms for giving special assistance to certain states forming their non-plan commitments. The states

1974 AIR 2192

were totally opposed to handing over the administration of agricultural income tax to the Centre. In 1971, the North Eastern Council was set up by the North Eastern Council Act, 1971. Comprising 8 states i.e. the seven sisters and Sikkim, it was to serve as the nodal agency for socio-economic development of NE region. Unlike the Zonal Councils, it has to its credit a lot of achievements in the electricity and education sectors. The Second Administrative Reforms Commission in its 15th Report on State and District Administration suggested that the North Eastern Council (NEC) should establish an apex Regional Academy for Human Resource Development as an autonomous body with academic and executive flexibility. In the meanwhile, the Rajmannar Committee Report came out in 1971 comprehensively reviewing centre-state relations. It recognised the urgent need to constitute a non-political advisory body u/a 263 to keep inter-governmental relations under constant review. Since such a body would be free of politics, hence it would command greater respect and its advices would be more acceptable. The ISC should not be merely advisory but be ordinarily binding on both the Centre and the States. No decision of national importance or which may affect one or more states should be taken by the Union Government except after consultation with the ISC. Every bill of national importance or which is likely to affect the state interests should, before its introduction in the Parliament, be referred to the ISC, and its views thereon should be submitted to Parliament at the time of introduction of the Bill. It is apparent that the Rajmannar Committee gave the most proactive recommendations. It was due to Mrs Indira Gandhis misadventures that in Kesavananda Bharti v State of Kerala 7(1973), the Courts evolved the basic structure doctrine to

AIR 1973 SC 1461

save the Constitution from the misplaced establishment sovereignty of the Union Parliament. Chief Justice Sikri clearly stated that the federal character of the Constitution was a feature of the basic structure of the Constitution which was, hence, not opens to whimsical amendments. And the Doctrine of Supremacy of the Constitution is part of basic structure i.e. neither of the three constitutionally separate organs of the State can leap outside the boundaries of its own constitutionally assigned sphere or orbit of authority into that of the other. Federalism came heavily under pressure with the declaration of emergency on 26th June 1975 under ominous conditions. Apart from damaging the federal structure, it also sowed the seeds of secessionist militant movement among the Sikhs in Punjab. However, it must be kept in mind that declaration of emergency in itself is not an attack on federalism. But if the same is done under questionable circumstances not in sync with the spirit with which the provision for it was enacted, then federalism is surely under attack. The amendments introduced in Article 356 by the 44th Amendment Act helped to mitigate the abuse of emergency provisions. By deleting the clauses which made the declaration and continuance of emergency by the President conclusive, it provided an opportunity for judicial review i.e. the Courts can now take a more active part in preventing a malafide exercise of power to impose Presidents rule. Quoting Justice P.B. Sawant in S.R. Bommai v Union of India, ....The courts should not lightly decline to exercise judicial review when as a matter of common knowledge, the emergency has ceased to exist.....This amendment has been prompted not only by the abuse of the Proclamation of emergency arising out of war or external aggression, but even more, by the wholly unjustified Proclamation of emergency issued in 1975 to protect the personal position of the Prime Minister

This declaration of emergency had another significant impact. It gave an opportunity to the nascent opposition, struggling for its birth, a burning political cause and a strongly shared grievance that enabled the leaders to sink their differences and to plan for the future. This led to the rise of the Janata Party, Indias first alternative to the Congress, which won in 1977 elections, marking a watershed in Indian politics. It is to be noted that the break up from single party rule across the country and the rise of regional parties happened simultaneously with the existing virtually single party rule of Congress. It was because of the federal structure that people could aspire for share in power. The National Development Council continued to meet once a year, on an average, throughout the Seventies, but in the Eighties, as the relations between the Congress and the opposition grew more and more strained, the frequency of the meetings declined. In the eighties, it met not more than seven times, and the meetings were marked by acrimony and tension. The West Bengal Government Memorandum on Centre State relations, prepared by the Left Front Government of West Bengal in 1977, reflected the increasing disagreement with the Centre and portrayed the Constitution as essentially unitary in character. Many of its recommendations were similar to those of Rajmannar Committee. In State of Rajasthan v Union of India, States of Rajasthan, Madhya Pradesh, Punjab, Bihar, Himachal Pradesh and Orissa challenged the sufficiency of grounds of action by the governor under Article 356(1). Chief Justice Beg held that sufficiency or inadequacy of the grounds for declaration of emergency could not be gone into by the Court. Only if the grounds are disclosed to the public by the Union Government which revealed that a constitutionally or legally prohibited or extraneous or collateral purpose was sought to be achieved,

only then the Court would look into it. Dissent was been expressed against this judgement in S.R. Bommai case which expanded the scope of judicial review. In 1978, the Chief Ministers Conference of non-Janata Party CMs of South India was held. They discussed the language issue i.e. the imposition of Hindi on the non-Hindi speaking people, and urged the PM to intervene. Mrs Indira Gandhi returned to power in 1979. Her highhandedness further invigorated movements for autonomy within the existing states and movements for separation from the Union as in Andhra, Assam and Punjab. In 1983, the Conference of non-Congress ruled states was held. It paved the way for the formation of Council of Chief Ministers for Southern Region. They expressed that states should discuss mutual problems at their own level amongst themselves. Centre should be approached only if they fail in solving the issues ate their own level. They also felt dwarfed at the meetings of the NDC in which the Centre and the Planning Commission dominated. The Council of CMs for the Southern Region was the precursor to the Council of Chief Ministers of all States. It was in favour of cooperative federalism in true spirit of the Constitution. Opposition Conclaves took place in different parts of the country to express views on centre-state relations. In response to the call of CM of Andhra Pradesh, N. T. Rama Rao, the first Opposition Conclave was held in Vijayawada in 1983. Fourteen non-Congress parties gathered to criticise the Centre for encroaching upon the powers of the states and the Centre was held responsible for all economic problems of the country. In 1984, Delhi Conclave was held. It was opined that the Union was only a mother organisation to coordinate the activities of various states, helping them to develop. It could not operate as an institution or treat the state governments as its branch offices. The states would soon become just puppets dancing to the Centres tune and unable to exist as viable territorial units. In the Srinagar Opposition Conclave, 10 nonCongress parties gathered. It was suggested that Governors must be appointed

by the President on the basis of a panel forwarded by the State Governments concerned and Articles 200 and 201 should either be suitably amended or else deleted. It also said that it must be mandatory for the President to constitute ISC. And that the NDC and the Planning Commission should be given constitutional and statutory status with proper representation of states on these bodies. The last was the Calcutta Conclave participated by 18 non-Congress parties accusing Indira Gandhi of engaging in a conspiracy against the Opposition. Opposition conclaves should be made a regular feature of our dynamic system. They symbolise a healthy and responsible federalism. They are a useful forum for getting to know the other side of the picture. Such conclaves must be held and thereafter be covered well by the media for the knowledge of the public. But the same requires a mature Opposition too. If the same is ensured, opposition conclaves can serve as a fantastic form of institutionalised criticism and pro activeness. It may even transform into a pseudo shadow cabinet system found in the UK. In this background of simmering discontent among opposition ruled states, Mrs Gandhi constituted the Commission on Centre State Relations headed by Justice R. S. Sarkaria, a retired judge of the Supreme Court, in 1984 which submitted its voluminous report in 1988 to the Rajiv Gandhi Government recommending inter alia, a permanent Inter State Council as an independent forum for consultation with a mandate defined according to Article 263. It should deal with subjects other than socio-economic planning and development and have an advisory role only. Administratively, it should be called Inter Governmental Council. Mrs Gandhi was assassinated in 1984. But Congress came to power again due to sympathy vote for her son Rajiv Gandhi. Steady deterioration of centre-state

relations had come to head under Rajiv Gandhi. Meetings of the NDC became acrimonious. Tensions were most acute over financial matters. Rajiv Gandhi further increased the control of the centre over plan funds to be spent in the States by bringing majority of the programs under centrally sponsored schemes to include everything like drinking water and supply of oil seeds. The State governments were slowly side-lined from all areas of development generating resentment among the latter. Such a tendency is found even today (Rural Health Mission, Sarva Shiksha Abhiyan etc.) and it shows lack of confidence in the states and discourages initiative from the states making them dependent on the Centre for basics. It does not augur well for progressive federalism. It is also an instance of the misuse of the grants under Article 275. In D.C. Wadhwa v State of Bihar8 (1987), the Court upheld the writ petitions challenging the constitutional validity of the practise of the Governor of Bihar of repeatedly promulgating the same ordinances without caring to get the Ordinances replaced by Acts of the legislature. To quote Justice Bhagwati, The power to promulgate an ordinance is essentially power to be used to meet an extraordinary situation and it cannot be allowed to be perve rted to serve political ends To control unprincipled defections induced by allurements of office, money and pressure, the Tenth Schedule was added by the Constitution (52nd Amendment) Act, 1985. But since the desired goal could not be achieved, law was further strengthened by the Constitution (Ninety First Amendment) Act, 2003.It deleted the provision which did not treat mass shifting of loyalty by one-third as defection.

1987 AIR 579

An important Chief Ministers conference was held on June 11, 1989 to forge a consensus on the statutory creation of PRIs.With the economic liberalisation of the 1990s, State leaders came to demand partnership in the federal policy making processes that concern multilateral agreements with international organisations. This brought out into the open the economic and regional disparities making the same a matter of significant concern all the more for the federal government. At another level, inter-state competition of sorts came to mark the behaviour of state governments to attract FDI. Hence, economic liberalisation prompted a change in federal relations from inter-governmental cooperation to inter jurisdictional competition among the states. After the assassination of Rajiv Gandhi on May 21, 1991, there was serious concern as to whether India really was a viable entity and whether it could hold together in the face of fissiparous tendencies springing all over the country. In 1996, a group of Chief Ministers and regional leaders met in Hyderabad to discuss what they considered to be a paradigm shift in federal relations in India. The slogan of their meeting was Federation without a Centre because they believed that with the formation of the United Front Government, the pattern of federal relations in India had undergone such a dramatic change where the Central government had been rendered superfluous. BJP came to power again from 1998-2003. It created three new states in 2000 to recognise the demands around tribal identities. It is important to note that these new states have emerged very much within the fabric of India which is a Union of States, reinforcing that our federalism is alive and kicking. Indian federalism has also experimented with sub state regional development councils to satisfy regional, ethnic and tribal aspirations. Inclusion of languages has been another mechanism of cooperative federalism. In 2003, Bodo, Dogri, Maithili and Santhali were included in the Eighth

Schedule of the Constitution. The inclusion allows privileges like simultaneous translation facilities in Parliamentary proceedings, allocation of central government funding for development of the language and its literature and is an effective tool to include the periphery into the mainstream. The National Commission to Review the Working of the Constitution (NCRWC) submitted its report in two volumes to the Government on 31st March, 2002. It recommended that there was a need to institutionalise the consultation process between the Centre and the states. It considered Article 263 as being in tune with the spirit of cooperative federalism and suggested that the ISC Order, 1990 may clearly specify in 4(b) of the order the subjects that would form part of the consultation in the ISC. Article 139A should be amended so as to provide that it can withdraw to itself cases even if they are pending in one Court where such questions as to legislative competence of Parliament or State Legislature are involved. Further, an Inter State Trade and Commerce Commission should be established. CHALLENGES The new challenges facing 21st Century federalism have further necessitated the pre-existing need for cooperative federalism, thereby making its practice as a form of governance all the more indispensable. Technological advances have led to tremendous improvement in connectivity and accessibility, both, physical as well as electronic. Environmental challenges of global nature like climate change do not recognise state frontiers. Pollution and conservation issues reflect the uncomfortable tension between decision making process of the governments at the centre-state local levels. Public Trust Doctrine is a new doctrine of federalism evolved by the Supreme Court in MC Mehta v Kamal Nath . It has established a direct link between the State and the public. To quote Justice Kuldip Singh, The

State is the trustee of all natural resources which are by nature meant for public use and enjoyment...and is under a legal duty to protect the natural resources. These resources meant for public use cannot be converted into private ownership. Disaster Management transcends inter-state boundaries. Globalisation has reinforced the need for concurrence between the geographical, climatic, environmental and technological diversities inter as well as intra states so that they may link with global processes for viable and sustainable development and growth. What is being experienced at the global level is also being felt at the local level. India is making strides in the global sphere and the local governments that promote shared partnership in development have come to be noticed today. Hence, whenever development programs or any other interests of states in matters relating to IT or investment by way of export, trade, exchange of projects etc. are touched by international agreements, the wellconceived demands of states should be met in order to promote truly cooperative, coordinative and multi-dimensional centre state relations. This requires mutual trust and confidence. Since the world has become a global village, the countrys in ternal security and political problems are open to external influence verging on intervention. For instance, the US Ambassador to India, Mulford, in 2006, overstepped his diplomatic role by writing directly to the Chief Minister of Assam offering assistance from the FBI to investigate a bomb attack in the state. Hence, under the garb of protecting human rights and on the plea that minorities are being tortured, big powers can intervene militarily which is against Indias interest. The states today have acquired sufficient political weight of their own through a pluralised party system enabling individual states to embark onto bilateral negotiations with the union bypassing the institutionalised bodies of collective policy framing that have proved to be ineffective, thus lending a negotiatory

character to our federalism. However, the same must be taken with a pinch of salt because power sharing by states at the central level has not contributed towards reducing localism, parochialism and chauvinism of regionalists and sub-regional parties. Increase in bargaining capacity will serve to strengthen cooperative federalism only if the supposed drawbacks of centralism are mitigated through it. The increasing voices of autonomy and separatism have vitiated the political and social fabric of the federal structure. States are increasingly harbouring feelings of deprivation and alienation and have begun viewing all problems from a narrow parochial outlook. Moreover, their approach is becoming violent confrontationist. This not only weakens the nation politically and economically but also makes the land fertile for the growth of terrorism and insurgency. The Indian Union has united its rich diversity of its humungous population serving as an example to the rest of the world. This is an asset to be built upon for the future. To override the fissiparous tendencies, only the legitimate grievances of the regions or states should be addressed as far as possible within the framework of the federal Constitution. More importantly, a strong sense of nationhood is necessary to maintain our territorial integrity and internal security, and this cannot be accomplished without cooperative federalism. Terrorism, militancy, organised crimes, problem of internally displaced persons, refugees all these require that the country as a whole comes together and the institutional bodies under state governments help the centre by collectively making available the necessary information and resources. The need to come together today is not only the consequence of the new challenges facing the nation but that the same will serve as an antidote to prevent such challenges from recurring in future. Cooperative federalism alone strengthens the nation from within by enabling it to withstand adversities and challenges because of its inherent resilience and malleability.

CONCLUSION A cooperative relationship between the Centre and the States is the need of the hour. Without a cooperative relationship, it will not be possible to move ahead in the present economic world. The various technological advancements, economic and trade activities and external aggressions across the world call for a cooperative relationship between the center and the states in order to provide stability and security in the country. The Sarkaria Commission report has also emphasized on the creation of a strong center state relationship. Cooperative federalism is the means to achieving a strong nation. There is requirement of giving greater flexibility and authority to the National development council by constituting it under the provisions of Article 263. Further, there should be greater involvement of the states in the planning process and greater coordination in raising the funds for meeting the demands of the developing economy. Thus, a cooperative relationship is developed by the creation of various councils which work for the benefit of the states as well as the center and also by giving full credit to all the acts throughout the territory of India. SUGGESTION For a more effective cooperative federal relationship it is required that the following steps are taken: (a) The Zonal Councils should be reorganized under the provisions of Article 263 to give them a constitutional status, thus providing them with greater authority and flexibility for proper functioning. (b) The participation of the states in the planning commission and planning process should be increased so as to ensure the formulation of more object oriented plans which seek to promote the welfare of all the states.

(c)

The states should be encouraged to take a more active part in raising the

funds for their developmental works. More grants should be provided to the poorer states which cannot raise funds as compared to the richer states. (d) The grants given by the center to the states should not be politically motivated but based on the requirements of the states. (e) The states should act for the overall development of the country and should not act only for their own individual interests. Thus, it is required that the cooperative federalism is encouraged over the competitive relationship between the center and the states.