Table of Contents
FEDERALISM
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- deals with the relationship between union and state governments – in the matters of legislation, administration and finance.
- Schedule 7 of Indian constitution specifies Union list, State list and Concurrent list, based on which the scope of work and powers of union and state governments are decided.
- This division of powers between union and state government ensures stable and effective governance within the country. Union and states are constitutionally obliged to cooperate with each other on the matters specified in schedule 7 of the constitution.
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- The powers are tilted in favor of union government to ensure unity and integrity of India.
- The 73rd and 74th constitutional amendment introduced panchayati raj (Rural) and Municipality (Urban) system to strengthen the roots of cooperative federalism in India. Cooperative Federalism is part of the basic structure of Indian constitution and cannot be amended by the parliament.
- Cooperative federalism, also known as marble-cake federalism, is a concept of federalism in which national, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally or clashing over a policy in a system dominated by the national government.
- NITI ayog is created with the objective of making states a party to the developmental plan and policies of the government.
- States has been given freedom to select central scheme as per their requirement and can effect changes as per their need. .
- Joint venture between state and center to carry out infrastructure project like rail projects.
- Replication of success of one state to other state or at national level like karnataka’s e-mandi has been replicated as National Agriculture Market
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- On the other hand, competitive federalism deals with the relationship among two or more states (and not between union and state) in the matters of trade, investment and commerce. Union government is responsible only for making rules of this competition.
- States compete with each other to attract funds and investment, which facilitates efficiency in administration and enhances developmental activities.
- The Investors prefer more developed states for investing their money. Union government devolve funds to the states on the basis of usage of previously allocated funds.
- Thus, funds and investments flow in greater amount (both from central government and private investors) to those states which have shown optimum use of previously allocated funds.
- Thus, competitive federalism ensures minimum wastage and maximum use of resources. Healthy competition strives to improve physical and social infrastructure within the state.
- or example —— >>rajasthan and various other states have reformed their labour laws to attract investment and industrial expansion which will result into more jobs and development.
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