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IMPORTANT TOPIC FOR ECONOMY SECTION FOR MAINS ANSWER WRITING

Cooperative federalism vs competitive federalism

Cooperative federalism 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. 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.

Examples

1. NITI Ayog is created with the objective of making states a party to the
developmental plan and policies of the government.

2. States has been given freedom to select central scheme as per their
requirement and can effect changes as per their need.

3. Joint venture between state and center to carry out infrastructure project like
rail projects.

4.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.

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. In simple terms, competitive federalism means –
No work, No money. More work, More money. States compete with each other
on developmental fronts to attract more money. To facilitate this, states are
given more responsibility and autonomy in the matters of policy planning and
implementation. This help states to learn from each other and implement the
best practices as per their specific needs. It is after six decades of independence,
India has recognized that progress of the nation lies in the progress of its states.
Competitive federalism is not part of the basic structure of Indian constitution.
It is the decision of executives.

For example

• Rajasthan and various other states have reformed their labour laws to
attract investement and industrial expansion which will result into more
jobs and development.
• Attending and promoting global investor summit by UP; Maharashtra etc
which will attract a lot of investment in these states.
• Allowing states to propose plan of smart city and competing for FFC
special grant for local government.
• Most of the state now organizes investors meet to showcase facilities in
their state to attract business and investment. This has lead to
improvement in business environment in various state.

Cooperative and competitive federalism are not mutually exclusive. They have
the same basic principle underlying – progress of the nation as a whole.
 Obstacles in the process of competitive federalism

While the competition between states, reflected in the World Bank’s Ease of
Doing Business index, has generated a lot of enthusiasm, this must be a
continuing exercise. There are only few well-off states like Maharashtra, Gujarat,
and Tamil Nadu which are competing. The present inter-state competition in
attracting investment is too early to determine whether it will really encourage
competitive patterns of investment on a continuous basis.

There are varied economic patterns in different states. There are deficit states
or the backward regions or the states under debt. Those states should not be
treated on par with the well-off states. The states like West Bengal, Bihar, Orissa,
and Assam have protested against the uniform approach in funding because of
their special situations in which the central government has to provide special
funds to these states. Without special funding these states cannot imagine their
participation in competitive federalism.

Though the states are provided with financial independence, it is a fallacy to

assume that all the states would perform uniformly in the process of
development because while some states have favourable factors like skilled
labour, capital and infrastructure, innovative service industries other states
lagging behind. For that states with unfavourable climate still need the help from
Centre.

The GST law may help some of the less productive States to raise the revenue as
the tax will be a destination-based levy. But the opposition of few well-off states
with respect to revenue loss in implementation of GST system points that there
is lack of will in participating in the process of competitive federalism.

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·
Criminalization of Politics

Criminalization of politics means criminal entering politics and taking part in the
governance of the country.
Provisions
1. Article 102(1) and 191(1) disqualifies an MP and an MLA on certain
grounds
2. Section 8 of the Representation of People Act, 1951, bans convicted
politicians.
3. Lily Thomas case (2013) – charge-sheeted MLA and MP’s will be
immediately disqualified
Statistical analysis
1. The criminalization of politics has escalated its root from the legislature to
executive and from executive to judiciary.
2. The proportion of such candidates which stood at 15% in the year 2009
rose up to 17% in 2014 election and has further gone up to an excruciating
19% in 2019 election in India, as reported by the Association for
Democratic Reforms (ADR).
3. About 13% of candidates who have contested the election in 2019 are
accused of heinous crimes that include murder, attempt to murder,
kidnapping, rape and other crimes against women.
Reasons
1. Vote bank – to buy votes criminal provides tones of money and
supporting hand to fulfill other illegitimate purpose of parties
2. Gap between voter and EC – people lack awareness of rule of EC, MCC is
openly flouted without stringent punishments
3. Toothless laws - laws are not stringent to prevent convicted criminals
from standing for election.
4. Intra Party Democracy is weak – no regulation to restrict criminal from
entering political party- he may be disqualified to be a legislator but he
may continue to hold position within his party
 5. Political control of the police, state money, corruption, lack of ethics,
values, and loopholes in the function of the election commission.
Impact of Criminalization
1. Sanctity of parliament undermines as law breaker become law maker
2. Faith of public get reduced in judicial machinery
3. Weak enforcement of rule of law and increase in social divisions
4. Domino effect – because focus of party is on winning, they tend to
included more and more influential element, hence it perpetuates
criminalization of politics
5. Undermine electoral culture
Way Forward
1. Curb cost of campaigning
I. Need to curb the gargantuan cost of campaigning to ensure playing level
field to anyone who want to contest election
2. Disqualification of tainted politicians on the framing of charges itself, but
along with adequate safeguard.
3. Adhere to law commission recommendation
I. Law commission recommended – that if one get conviction on account of
filing false affidavit, he must be disqualified
4. Break nexus between politicians and criminal
I. We have to change the nature of the government machinery, make it
more transparent, accountable and pervade.
5. Awareness
I. Create awareness among people (voters) about their rights and they
should vote for the right person.
6. Intra party democracy
I. Party should ensure that ticket should be given only to those who do not
have any criminal background – EC needs to make rules on that front.
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