Licchavi Lyceum


Licchavi Lyceum

Indian federalism is moving from co-operative federalism to competitive federalism. Comment.

The shift from cooperative federalism to competitive federalism in India represents a significant evolution in the country’s federal structure and governance. Here’s an explanation of this transition:

Cooperative Federalism:

  • Historical Perspective: Cooperative federalism in India was the dominant approach during the early years of independence. The framers of the Constitution envisioned a federal system where the central and state governments would work together closely to achieve common goals, address socio-economic challenges, and promote national unity.
  • Key Features: Under cooperative federalism, there was a higher degree of collaboration and coordination between the central and state governments. The planning process, as exemplified by the Five-Year Plans, involved both levels of government in policy formulation and resource allocation.
  • Central Role: The central government played a central role in planning, resource allocation, and policy implementation. Financial resources were often transferred from the center to the states to fund various development programs.

Competitive Federalism:

  • Emergence: Over the years, India has witnessed a transition toward competitive federalism, driven by economic reforms, decentralization, and globalization. Competitive federalism gained prominence as states began to seek greater autonomy and economic self-sufficiency.
  • Key Features: Competitive federalism emphasizes healthy competition among states to attract investments, promote economic growth, and improve governance. States now compete to create a business-friendly environment, enhance infrastructure, and provide better services to citizens.
  • Decentralization: The 73rd and 74th Constitutional Amendments, which established Panchayati Raj institutions and urban local bodies, contributed to decentralization and empowered local governments. This shift has allowed states to have a more direct role in governance.
  • Economic Liberalization: Economic reforms, including liberalization and globalization, have encouraged states to adopt investor-friendly policies, privatize industries, and develop special economic zones to attract businesses.

Key Differences:

  1. Focus: Cooperative federalism prioritizes collaboration and joint planning between the central and state governments. Competitive federalism focuses on states competing for resources and investments.
  2. Autonomy: Competitive federalism allows states more autonomy in economic and policy matters, whereas cooperative federalism involves greater central government intervention.
  3. Economic Growth: Competitive federalism aims to stimulate economic growth by fostering a business-friendly environment, while cooperative federalism aimed at addressing socio-economic disparities.


  • Competitive federalism has led to increased economic growth and development as states are incentivized to adopt innovative policies and attract investments.
  • It has promoted fiscal discipline and efficiency in the use of resources, as states have to demonstrate their capability to manage funds effectively.

In conclusion, the shift from cooperative federalism to competitive federalism in India reflects the changing dynamics of governance and economic development. While cooperative federalism still plays a crucial role in addressing national issues, competitive federalism has become a driving force in promoting economic growth, innovation, and good governance at the state level.