{"id":44787,"date":"2025-06-04T20:44:20","date_gmt":"2025-06-04T15:14:20","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=44787"},"modified":"2025-06-04T20:44:22","modified_gmt":"2025-06-04T15:14:22","slug":"niti-aayog-deepening-federalism-india","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/04-06-2025\/niti-aayog-deepening-federalism-india","title":{"rendered":"NITI Aayog and a Deepening Federalism in India"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/Centre-States Relations; Governance<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Over the past 11 years, India has embraced an era of cooperative and fiscal federalism. The Centre and state governments have actively collaborated on socioeconomic transformation to achieve shared goals.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Federalism &amp; Types<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reinterpreting Federalism: <\/strong>The &#8220;federalism&#8221; isn&#8217;t explicitly mentioned in the Constitution, however, B.R. Ambedkar&#8217;s vision of a system &#8220;both unitary as well as federal according to the requirements of time and circumstances&#8221; has been the guiding principle. The recent decade exemplifies a deliberate move towards the &#8216;federal&#8217; aspect, shifting from a traditionally more unitary tilt.<\/li>\n\n\n\n<li><strong>Cooperative Federalism: <\/strong>It means the Centre and states work together as partners in decision-making and implementation. Instead of the Centre dictating everything, states have equal voice.\n<ul class=\"wp-block-list\">\n<li><strong>Example:<\/strong> NITI Aayog\u2019s Governing Council, where Chief Ministers and the PM sit at the same table.<\/li>\n\n\n\n<li>Idea: \u201cSabka Saath, Sabka Vikas\u201d \u2014 development through unity.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Competitive Federalism:<\/strong> It means states compete with each other to perform better, attract investments, improve governance, and get rewarded.\n<ul class=\"wp-block-list\">\n<li><strong>Example: <\/strong>Aspirational Districts Programme \u2013 states compete to improve health, education, etc.<\/li>\n\n\n\n<li>NITI Aayog\u2019s indices (Health Index, SDG Index, Innovation Index) create benchmarks and rankings.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Fiscal Federalism: <\/strong>It refers to sharing of financial resources between Centre and states.\n<ul class=\"wp-block-list\">\n<li><strong>Example: <\/strong>GST Council \u2013 where tax policy is jointly decided by Centre + states.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Role of NITI Aayog in Promoting Federalism<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Replaced Planning Commission in 2015.<\/li>\n\n\n\n<li>Became a bridge between Centre and states.<\/li>\n\n\n\n<li>Promotes both cooperative and competitive federalism (Aspirational Districts Programme)<\/li>\n\n\n\n<li>Unlike the old Planning Commission, NITI doesn\u2019t just fund, it guides, facilitates and coordinates.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Other Initiatives Boosting Federalism\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>GST Council:<\/strong> The GST Council has ensured consensus-driven fiscal governance, with states receiving 71% of GST revenues, while the Centre retains about 29%.\n<ul class=\"wp-block-list\">\n<li>Since GST\u2019s implementation, the Centre has foregone 0.5-1% of GDP annually to fund the 14% compensation guarantee for states.<\/li>\n\n\n\n<li>Between 2017-18 and 2024-25, the Centre has provided \u20b96.52 lakh crore in GST compensation to states, ensuring stability during the transition period and supporting state economies.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Tax Devolution:<\/strong> The states\u2019 share in the divisible tax pool increased from 32% to 42% <em>(recommended by the 14th Finance Commission)<\/em>, empowering them with greater financial autonomy.\n<ul class=\"wp-block-list\">\n<li>Transfers to economically weaker states such as Uttar Pradesh, Rajasthan, and Chhattisgarh have seen substantial increases over successive Finance Commissions.<\/li>\n\n\n\n<li>States&#8217; share in central taxes grew from \u20b93.37 lakh crore in 2014-15 to \u20b912.23 lakh crore in 2024-25.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Boost in Centrally Sponsored Schemes (CSS) funding: <\/strong>Between 2015-16 and 2023-24, Centrally Sponsored Schemes (CSS) and Centrally Sponsored Schemes (CSS) allocations increased by 197%, leading to significant socioeconomic transformations.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges in Indian Federalism<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fiscal Centralization:<\/strong> States rely heavily on the Centre for funds \u2013 over 40% of their revenue comes from transfers. The sunset of GST compensation in 2022 has left many states fiscally strained (e.g., Punjab, Kerala).<\/li>\n\n\n\n<li><strong>Unequal Bargaining Power:<\/strong> Strong Centre vs weaker states dynamic persists. Smaller or politically-opposing states often struggle to negotiate better terms in fund allocation or policy implementation.<\/li>\n\n\n\n<li><strong>Over-centralization of CSS (Centrally Sponsored Schemes):<\/strong> One-size-fits-all scheme design ignores local realities. States often bear partial cost burdens but have limited say in design and targets.\n<ul class=\"wp-block-list\">\n<li><strong>E.g.<\/strong> PMGSY, PMAY \u2014 centrally set parameters may not suit every state.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Political Polarization: <\/strong>Allegations of political discrimination in fund allocation are common.\n<ul class=\"wp-block-list\">\n<li>E.g., West Bengal, Kerala, and Delhi have often accused the Centre of bias.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Weak Institutional Mechanisms: <\/strong>Bodies like the Inter-State Council and Zonal Councils are underutilized.\n<ul class=\"wp-block-list\">\n<li>NITI Aayog is advisory and lacks statutory authority. It does not have constitutional backing, limiting its authority and accountability.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Encroachment on State Subjects:<\/strong> Centre often intervenes in State List subjects via national schemes or laws.\n<ul class=\"wp-block-list\">\n<li>Farm Laws (now repealed) were seen as encroachment on agriculture.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Federalism as a Guiding Principle<\/strong>: Federalism remains a core governance philosophy, although it does not appear explicitly in the Indian Constitution.\n<ul class=\"wp-block-list\">\n<li>As <strong>B. R. Ambedkar<\/strong> noted, \u2018Our Constitution would be both unitary as well as federal according to the requirements of time and circumstances\u2019.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Suggestions for strengthening overall functioning of NITI Aayog are:\n<ul class=\"wp-block-list\">\n<li>Granting NITI Aayog statutory status to enhance its authority.<\/li>\n\n\n\n<li>Strengthening state consultations to ensure equitable policy formulation.<\/li>\n\n\n\n<li>Improving funding and staffing to enhance operational efficiency.<\/li>\n\n\n\n<li>Balancing cooperative and competitive federalism to prevent unintended consequences.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q]<\/strong> How has the transformation of the Planning Commission into NITI Aayog impacted Centre-State relations, and to what extent has it contributed to deepening federalism in India?<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/indianexpress.com\/article\/opinion\/niti-aayog-and-a-deepening-federalism-10046735\/\" rel=\"nofollow noopener\" target=\"_blank\">Source: IE<\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past 11 years, India has embraced an era of cooperative and fiscal federalism. The Centre and state governments have actively collaborated on socioeconomic transformation to achieve shared goals.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-44787","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44787","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=44787"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44787\/revisions"}],"predecessor-version":[{"id":44788,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44787\/revisions\/44788"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=44787"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=44787"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=44787"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}