1.Introduction:

The origin of the concept of federalism comes in various

approaches. Dicey stated that federalism is a national

constitution for a body of states which desire union and do

not desire unity. He described a federal state as political

contrivance intended to reconcile unity and power with the

maintenance of state rights. The essence of a federation is

the existence of union and its states and the division of

power between the union and the states and it is immaterial

whether the bond of the union is strong or weak.

Political integrity of union and each state seems

to be essential to the federal concept. In one of the

encyclopaedias federal was brought out as a mode of political

organization that unites separate states to allow each to

maintain its own fundamental political integrity. Federal

systems do this by requiring that basis policies be made and

implemented through negotiation in some form, so that all the

members can share in making and executing decisions; they

stress the virtues of dispersed power centre as a means for

safeguarding individual and local liberties. 

Misconception can also arise if one overlooks or

underrates the importance of federal principle, namely

constitutional distribution of power and diverts one’s might

modify the scheme of distribution in special situations or to

other peculiarities of the country’s constitution. A true

federation contemplates that the political system must reflect

1

principle by actually diffusing power among a number of

substantially self-sustaining centers. This is sometimes

called non-centralisation. But non-centralisation is different

from decentralization. In the latter, there is a conditional

diffusion of specific power, but it is subject to recall by

unilateral decision. It is also different from ‘devolution’,

in which a central Government grants power unilaterally to

sub-national units. Non-centralisation in exercising political

power cannot be taken away from the general or state

governments without common consent. Federalism is intended to

preserve self-government.

United States as the oldest federation, the

separate existence of the states cannot be impaired, unless

the constitutional is thrown away. It is an indestructible

union of indestructible states. In Canada whose federal status

was doubted for sometimes, the distribution of legislative

power is a constitutional mandate and is immaterial that there

is learning in favour of centralization. These separation of

two legislate domains is shown by the fact that the Canadian

parliament cannot legislate on matter in the provincial list

except in special cases. In Australian parliament of the

Australia Commonwealth under Section 51 and 107 of the

Australian Constitution has only the enumerated legislative

power, while the residuary power remains with the states. A

dual government with coordinate powers is very much in

existence and in fact preamble to the Commonwealth of

Australia Constitutional Act, 1900 uses expressions implying

2

the federal element. In Switzerland the states have separate

constitution of their own which are guaranteed by the federal

constitution. But at the same time the Constitution in

Articles 5, 14, 15 to 17 contains enough provisions to ensure

that federal provisions in the constitution are maintained.

Genesis of idea of federalism in India was first traced

in Simon Commission, “Indian Statutory Commission” appointed

in 1927. The Commission was meant for revision of the

Constitution for India. In its report in 1930, the Commission

recommended the evolution of India into “a federation of self-

governing units”.

The representatives of Princely States declared during

the First Round Table Conference 1930-32) that they would join

an “All India federation with a self-governing British India”.

The White Paper embodying the report of Round Table

Conference, in March 1933 was submitted to Joint Select

Committee of Parliament, which preferred creation of “All

India Federation”.

By Government of India Act 1935, the background was

ready for making India to become a federation with 11

Governor’s Provinces and 650 Native States, who supposed to

have fifty per cent seats in Council of States. However,

execution of the instrument of accession was the prerequisite

to form the Federation, which could not become a reality.

The Cabinet Mission Plan in 1946 contemplated the

division of the country into three Zones, Zone A, Zone B and 3

Zone C, based on the concentration of Hindus and Muslims.

Zones B and C included Muslim dominated areas. The Center was

supposed to be uniting point of these three zones, with its

power confined only to Defence, Foreign Affairs and

Communication. Constituent Assembly was to be divided into

three sections according to the Zonal Scheme for evolving

provincial and group Constitutions. The proposal of grouping

of Provinces became point of dispute and disagreement, while

in general; the Plan was acceptable to major political

parties. The division of three Zones eventually resulted in

the Partition as a precondition for Independence. While

presenting the Partition scheme, Lord Mount batten insisted

the major parties to agree for partition to have the

federation with a strong center, instead of weak center as

contemplated in Cabinet Mission Plan.

Generally speaking, the CONFEDERATION is a system where

the units dominate the Union, in Unitary State, the Union

dominates the Units, and if Union and Units are co-equal it is

Federation. In a Confederation, there will be an alliance

between independent states where units can secede. In Unitary

State the legislatures of Units derive power from Central

Legislature. Vital feature of federation is division of

legislative powers, each unit being sovereign in its own

sphere.

Dr B.R. Ambedkar used the term Union to make it clear

that states had no right to secede from the Union to set

themselves into separate States. He said that this Union was

Federation and called it a flexible federation to say that it

4

was not as rigid as the American Constitution was. However the

expression Federation was not used deliberately.

In Keshavananda Bharathi1 case, the Supreme Court said

that the federal character of the Constitution was its basic

feature. In State of Rajasthan v. Union of India2 it was held that

states could not assert any right based on the supposed

federal character of the Constitution. Supreme Court said:

“The Constitution is amphibian in sense that it can move

either on the federal or the unitary plane. When action is

taken under Article 356 the movement is on the unitary plane.”

In West Bengal v. Union of India3 the Supreme Court observed:

‘The Indian Union is not a true federation”.

Five Essentials of Federal Character:

1. The Constitution must be written

2. It must be rigid

3. It must be supreme law of the land

4. There must be division or distribution of powers between

the Union or Federal Government and the various States or

Provinces

5. There must be an independent and impartial judiciary to

interpret the Constitution and the Laws.

Indian constitution resembles a federal constitution but

in essence it is not a federal constitution. The unique

feature of Indian Constitution is the presence of features

1 AIR 1973 SC 14612 AIR 1977 SC 13613 AIR 1963 SC 1241

5

which are necessary for existence of a federation, at the same

time there are provisions which make the Union Government

powerful vis-à-vis that of state Governments. Hence Indian

Constitution can be termed as Quasi Federal in nature and

Indian Union can be called as ‘Centralised Federation’.

Former Chief Justice Beg, in State of Rajasthan V Union of India,4

called the Constitution of India as a ‘ amphibian’. He said

that “….. if then our constitution creates a central

government which is ‘amphibian’ in the sense that it can move

either on the federal or the unitary plane, according to the

needs of situation and circumstances of the case……..”

Likewise in S.R.Bomai V Union of India,5 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 pragmatic federalism which, while

distributing legislative powers and indicating the spheres of

governmental power of state and central governments, is

overlaid by strong unitary features……….”

2.Federalism: Concept and Definition

There is no accepted definition of federalism. Federal

concept was initiated by some politician. However the terms

itself is ambiguous and controversial. Some jurist defined the

federalism as following:

Professor K.C. Wheare said that “the federal principle is the

method of dividing the powers between general and regional

4 AIR 1977 SC 13615 AIR 1994 SC 1918

6

governments. Each government within a sphere coordinate and

independent. Existence of coordinate authorities independent

of each other is the gist of the federal principle.”6

According to classical observation of Dicey;-

“Federalism means distribution of the forces of the

State among the coordinate bodies each originating in and

controlled by the Constitution.”7

Riker8 defines federalism in a very simple way saying that

“The Constitution is federal if it provides for two levels of

Government. Each of which has some guaranty of its contained

autonomy within its sphere.

A principle of government that defines the relationship between the central

government at the national level and its constituent units at the regional, state, or

local levels. Under this principle of government, power and authority is allocated

between the national and local governmental units, such that each unit is delegated

a sphere of power and authority only it can exercise, while other powers must be

shared.

The term federalism is derived from the Latin root foedus,

which means "formal agreement or covenant." It includes the

interrelationships between the states as well as between the

states and the federal government. Governance in the United

States takes place at various levels and branches of

government, which all take part in the decision-making 6 WHEARE, FEDERAL GOVERNMENT, 27-28 (1964)7 A.V.Dicey, Introduction to the Study of the Law of the Constitution, 7th ed. (London: Macmillan, 1908) at 140.8 William Riker’s Federalism: origin, Operation , Significance (1964)

7

process. From the U.S. Supreme Court to the smallest local

government, a distribution of power allows all the entities of

the system to work separately while still working together as

a nation. Supreme Court justice HUGO L. BLACK wrote that

federalism meant a proper respect for state functions, a

recognition of the fact that the entire country is made up of

a Union of separate State governments, and a continuance of

the belief that the National Government will fare best if the

States and their institutions are left free to perform their

separate functions in their separate ways.

3. Importance of Federalism

Federalism decentralizes our politics in many ways. For

example, senators are elected to represent their state, not

the nation. With more levels of government, more opportunities

exist for political participation. Judicial power also is

enhanced by federalism. Federalism also decentralizes our

policies. The history of federalism demonstrates the tension

between the states and the national government over who should

control policy. The overlapping powers of the two levels of

government mean that most debates over policy become debates

over federalism. States are responsible for most public

policies dealing with social, family, and moral issues. These

become national issues when brought to the national government

by an aggrieved group. The American states are also policy

innovators, being responsible for many reforms, new ideas, and

new policies.

8

3.1 Importance of Federal Principles in United States 

The federal principle in a federation has two aspects –

national unity and state right. This implies a rigid

constitution, the amendment whereof should as a rule, involve

the union as well as the states. The United States

constitution achieves this by providing that when amendments

are proposed by federal legislature in constitution, three-

fourths of the states must ratify the amendment before the

amendment can become effective. This procedure is mandatory.

It also guarantee to every state in the union a Republican

Form of Government and shall protect each of them against

invasion, and on application of legislature or the executive

(when legislature cannot be convened) against domestic

violence. There is also prohibition against states entering

into any treaty, alliance or confederation or any agreement or

compact with another state or with a foreign power without the

consent of Congress.

United States (unlike India) only one legislative list

enumerated the powers of the Union and the remaining subjects

are left to states (except matters expressly prohibited by the

constitution to the States). This is made more clearly by

tenth Amendment. The power not delegated to the United States

by the constitution, nor prohibited by it to the States are

reserved to the states respectively or to the people.

Executive authority of the union and that of states

9

in United States runs in parallel streams. However indirect

federal control over state administration may come to be

exercised where the federal government has made ‘conditional

grant’ to the states.

The United States carries on the principle of dual

sovereignty into judicial system also. There is a dual system

of courts. Unlike India, US does not have a provision for

inter-State Council. But the Governor’s Conference, presided

over by the president of US, serves as a medium for discussing

matters of common interest. Besides this, a statutory body-the

Inter-State Commerce Commission-which was set up under federal

law of 1887, performs important functions connected with

Inter-State Commerce.

3.2. Importance of Federal Principles in Australia

The Australian federation was set under

Commonwealth of Australia Constitution Act, 1900 whose

preamble uses the words “Federal Commonwealth”. Before 1900,

the colonies in Australia had (since 1850) their own

constitutions still survive, subject to the provisions of the

federal constitution. Division of powers between the states

and union is maintained by special provisions requiring

special procedure for amendment, including a referendum of

electors of the Australian House of Representatives. Unlike

American Constitution, Australian Constitution has no express

prohibition against an individual state entering into a

10

treaty. But the exclusive power of legislation on ‘external

affairs’ is entering given to the Australian Commonwealth.

In Australian Constitution topics enumerated in the

constitution as within legislative competence of parliament of

the commonwealth of Australia, some are regarded as exclusive

powers of the commonwealth, while rest are regarded as

concurrent powers of the Commonwealth and states. The

Exclusive powers are: seat of Government of Commonwealth,

places acquired for public purposes, federal public services,

customs, excise, bounties, surrendered territory, navel and

military defences and forces and coinage – this had led to

indirect emergence of concurrent list in Australia under

Section 107. Inconsistency between federal and state law on

concurrent matter is to be resolved by applying section 109.

Executive power in Australia is vested in Governor-General for

Commonwealth. However it seems that the Commonwealth can spend

its finances even on matters assigned to the states.

Australia does not have a system of dual courts for

disputes under Commonwealth legislature and disputes under

state legislation respectively. But disputes between the two

are exclusively within original jurisdiction of the High Court

of Australia. Under section 105 – Australian Loan Council has

been set up to regulate public borrowing, not only through

federal loans but also through state loans raised in the name

of and on the security of commonwealth. By regulating public

finances, the council can function as an effective body for

11

union-state coordination, particularly because the loan

agreements are justifiable.

3.3. Importance of Federalism in India

The Federal scheme in the Constitution of India is

adopted from the Government of India Act, 1935. The said Act

made an innovation upon several precedents to make a treble

enumeration of powers, in order to make it as exhaustive as

possible and also to minimize judicial intervention and

litigation. The three legislative lists (I, II and III)

respectively enumerated the powers vested in the Federal

Legislature, the Provincial Legislature and to both of them

concurrently (Section 100). If however, a matter was not

covered by any of the three Lists that would be treated as a

residuary power of the Federal Parliament (Section 104) and

Section 107 provided for predominance of Federal law in case

of inconsistency with a Provincial Law, in the concurrent

sphere.

Borrowing the pattern of treble enumeration from

the Government of India Act, 1935, the Constitution of India

makes a three-fold division of powers namely;

a) List I or the Union List – It contains subjects over which

the Union shall have exclusive powers of legislation,

including 97 items. These include defence, foreign affairs,

banking, currency and coinage; union duties and taxes and the

12

like.

b) List II or the State List – It comprises of 66 items or

entries over which the State Legislature shall have exclusive

power of legislation, such as public order and police, local

Government, public health and sanitation, agriculture, forests

and fisheries, education, State taxes and duties, and the

like.

c) List III or the Concurrent List – It gives concurrent

powers to the Union and the State Legislatures over 47 items,

such as Criminal Law and procedure, Civil Procedure, marriage,

contracts, torts, trusts, welfare of labour, social insurance,

economic and social planning.

Thus the framers of the Indian Constitution attempted to

exhaust the whole field of legislation as they could

comprehend, into numerous items, thus narrowing down the scope

for filling up the details by the judicial process of

amplifying the given items. Besides, wherever any conflict

could be anticipated, the Constitution has given predominance

to the Union jurisdiction, so as to give the Federal system a

strong central bias. Similarly, in all the cases which have

come up to the Supreme Court, the Court has upheld the

jurisdiction of the Union Parliament. Thus, in case of

overlapping, the power of the State Legislature to legislate

with respect to matters enumerated in the State List has been

made subject to the power of the Union Parliament to legislate

13

in respect of matters enumerated in the Union and Concurrent

Lists, and the entries in the State List have to be

interpreted accordingly. Similarly, in the concurrent sphere,

in case of repugnancy between a Union and a State law relating

to the same subject, the former prevails. If, however, the

State law was reserved for the assent of the President and has

received such assent, the State law may prevail

notwithstanding such repugnancy, but it would still be

competent for Parliament to override such State law by

subsequent legislation.

These apart, the vesting of residual power under the

Constitution follows the precedent of Canada, for it is given

to the Union instead of the States as in USA and Australia.

The Constitution of India vests the residuary power i.e.; the

power to legislate with respect to any matter not enumerated

in anyone of the three Lists, - in the Union Legislature

(Article 248). However, the final determination as to whether

a particular matter falls under the residuary power or not is

that of the Courts.

4. Meaning of Co-operative Federalism

Co-operative federalism is a political and constitutional

concept developed in the early 20th century that emphasizes

the decentralization of power and a not necessarily equal

sharing of governmental responsibilities between federal,

state and local agencies and institutions. National and state

governments tackle issues together in a cooperative fashion as

14

opposed to a system in which policy is imposed on local

administrators by an all-powerful federal regime. As a result,

both national and state governments are simultaneously

independent and interdependent with an overlap of functions

and financial resources, but it is difficult for one person or

one institution to accumulate absolute power. In addition,

this distribution of government provides multiple points of

access for citizens interested in influencing state and

federal institutions, laws and policies.

The idea was first introduced in the United States during

the New Deal era of the 1930s and, as a result, the

constitutional concept of dual federalism nearly disappeared.

Under dual federalism, the U.S. national government was

granted a limited number of powers with the states otherwise

sovereign. The states were considered to be as powerful as the

federal government within their respective political spheres

and each was responsible for specific government functions

that did not overlap. States with a vested interest in

prolonging an economy based on slavery relied on dual

federalism to support their rejection of federal government

intervention.

4.1. Cooperative Federalism in America

In the American federal system, there are limitations on

national government's ability to carry out its policies

through the executive branch of state governments. For

15

example, in Printz v. United States,9 the Court held that the

national government could not directly require state law

enforcement officers to conduct background checks under the

Brady firearms legislation. The court explained that prior

decisions warned that "this Court never has sanctioned

explicitly a federal command to the States to promulgate and

enforce laws and regulations." And yet, there are significant

advantages in a federal system to obtain state assistance in

the local implementation of federal programs. Implementing

such programs through national employees would significantly

increase the size and intrusiveness of the national

government. Moreover, local implementation may assure that

these programs are implemented in ways that take local

conditions into account.

For this reason, Congress has often avoided adoption of

completely nationalized programs by one of two devices. In the

first, Congress creates a delivery system for federal programs

in which the national government encourages local

implementation of a federal program by providing significant

matching funds. In this context, the phrase may be found in a

number of Supreme Court and lower court federal cases. The

most frequent early use of the phrase may be found in a series

of cases describing the paradigm for federally sponsored

welfare programs such as medical assistance or the former Aid

to Families with Dependent Children (AFDC) programs in which a

participating state's program is financed largely by the

Federal Government, on a matching fund basis, subject to

9 521 U.S. 898 (1997)

16

federal mandatory regulations. More recently, the phrase has

been used in connection with other federal programs built on

the cooperative federalism model.10  Here, the motivation for

State compliance is that absent state compliance with federal

conditions, the state loses significant federal funding.

The second method of encouraging states to implement

federal programs is described in New York v. United States11. In this

form, the Congress states that it will take over the

regulation of an activity at the national level, unless the

State itself implements its own program of regulation meeting

minimum federal standards.12Here, the motivation for State

compliance is that absent state regulation, the state loses

power over the regulated area entirely. In New York v. United

States, the court explained:

"....where Congress has the authority to regulate private

activity under the Commerce Clause, we have recognized

Congress' power to offer States the choice of regulating that

activity according to federal standards or having state law

pre-empted by federal regulation13. . This arrangement, which

has been termed “a program of cooperative federalism,” Hodel,

is replicated in numerous federal statutory schemes. These

include the Clean Water Act, Arkansas v. Oklahoma, (Clean

Water Act “anticipates a partnership between the States and

10 California v. U.S. 438 U.S. 645 (1978) (Reclamation Act) and Schaffer v. Weist  546 U.S. 49 (2005).11 505 U.S. 144 (199212 Hills, Roderick M. (1998). "The Political Economy of Cooperative Federalism: Why State Autonomy Makes Sense and "Dual Sovereignty" Doesn'tAuthor". Michigan Law Review 96 (4): 813–944.

13 Hodel v. Virginia Surface Mining & Reclamation Association 452 U.S. 264 (1981) See also FERC v. Mississippi

17

the Federal Government, animated by a shared objective”); the

Occupational Safety and Health Act of 1970,  Gade v. National Solid

Wastes Management Assn.14, .

While the federal system places limits on the ability of

the national government to require implementation by a State

executive branch, or its local political subdivisions, that

limitation does not apply in the same way to State judicial

systems. In part, this is because the founders understood that

state courts would be courts of general jurisdiction, bound to

apply both state and federal law. In part, it is because the

State courts adjudicate cases between citizens who are bound

to comply with both state and federal law. When the Congress

seeks to establish federal legislation which governs the

behavior of citizens, the Congress is free to choose among

three judicial enforcement paradigms. It may open both federal

or state courts to enforcement of that right, by specifically

providing concurrent jurisdiction in the federal courts. It

may grant exclusive jurisdiction to the federal courts, or it

may choose to leave enforcement of that right to civil dispute

resolution amongst parties in State court.

4.2. Co-operative Federalism in Australia

The constitution effected an agreed transfer of powers

from colonial governments to the new Commonwealth covering a

range of subject matter areas set out, for the most part in

section 51. It also has plenary legislative power with respect

to Australian Territories, such as the Northern Territory and

the Australian Capital Territory. Within the areas of 14 505 U.S 88 (1992)

18

Commonwealth power specified in section 51 there are

indicators of opportunities for cooperative federalism in the

exercise of legislative powers. So the Commonwealth Parliament

may make laws for the peace, order and good government of the

Commonwealth with respect to:

(xxiv) The service and execution throughout the Commonwealth of the civil and

criminal process and the judgments of the courts of the States.

(xxv) The recognition throughout the Commonwealth of the laws, the public Acts and

records, and the judicial proceedings of the States.

(xxxiii) The acquisition with the consent of the State, of any railways of the State on

terms arranged between the Commonwealth and the State.

(xxxiv) Railway construction and extension in any State with the consent of that

State.

(xxxvii) Matters referred to the Parliament of the Commonwealth, by the Parliament

or Parliaments of any State or States, but so that the law shall extend only to States

by whose parliaments the matter is referred or which afterwards adopt the law.

(xxxviii) The exercise within the Commonwealth, at the request or with the

concurrence of the Parliaments of all the States directly concerned, of any power

which can at the establishment of this Constitution be exercised only by the

Parliament of the United Kingdom or by the Federal Council of Australasia.

Chapter III of the constitution, dealing with the

judicature, contains provisions under which the courts of the

various States are to be repositories for the exercise of such

federal jurisdiction as is conferred upon them by the

Commonwealth Parliament. This is in addition to the power that

the Commonwealth Parliament has to create its own courts and

19

define their jurisdiction. Section 77 of the constitution

authorises the Parliament to make laws defining the

jurisdiction of federal courts and laws:

Section 77(iii) Investing any court of the State with federal jurisdiction. So too

community law can be administered in national courts as well

as in the Courts of the Community. Section 80 of the

constitution, which requires that the trial on indictment of

any offence against any law of the Commonwealth be by jury,

also requires that “... every such trial shall be held in the

State where the offence was committed, and if the offence was

not committed within any State, the trial shall be held at

such place or places as the Parliament prescribes.” It is also

linked to the Commonwealth’s ability to use State courts for

the exercise of federal jurisdiction arising under the

criminal law of the Commonwealth. It also is linked to the

Commonwealth’s ability to use State prisons15.

In Chapter IV there are provisions mandating distribution

of Commonwealth revenue to the States – see ss 87, 89, 93 and

94. Section 96, which provides for conditional financial

grants from the Commonwealth to the States, supports the

uniform income tax scheme. The Commonwealth Parliament passed

an Act to grant general revenue to the States on the condition

that they did not impose their own income tax. Grants made

under section 96 have, by way of the conditions attaching to

15 Co-operative federalism inAustralia – an intellectualresource for Europe? I by Justice R S French at pp. 10-17

20

them, allowed the Commonwealth to exercise powers with respect

to education, health, housing, the environment and other areas

not covered by its legislative responsibilities. It is in

form, if not in substance, a provision which requires

cooperation in the limited sense that no State is obliged to

accept a financial grant under s 96 on conditions which it

does not regard as acceptable. Section 105 of the constitution

allows for the Parliament of the Commonwealth to take over

from the States their public debts. Although initially limited

to debts existing at the time of federation, that limitation

was removed in 1910 by referendum. In 1928 section 105A was

added to the constitution by referendum. It authorises the

Commonwealth to make agreements with the States with respect

to their public debts. The constitutions of the States

reflecting, in the case of Western Australia, its pre-

federation colonial constitution, are continued by section 106

of the Commonwealth Constitution. The powers of the State

Parliaments are saved by section 107, as are the laws of the

various States by section 108. States may surrender territory

to the Commonwealth under section 111, again an essentially

co-operative exercise. It was by such a surrender that the

Australian Capital Territory was created and similarly the

Northern Territory of Australia. Section 118 provides for full

faith and credit to be given throughout the Commonwealth to

the laws, public Acts and records and judicial proceedings of

every State. Every State is required by section 120 of the

constitution to make provision for the detention in its

prisons of persons accused or convicted of offences against

21

the laws of the Commonwealth and for the punishment of the

persons convicted of such offences. Other exercises of power

which require the consent of the States, include the

alteration of their limits and the creation of new States (ss

123 and 124). As may be seen from this review the constitution

provides for what can properly be described as cooperative

federalism under which, by making suitable arrangements,

Commonwealth and States, acting together, can “... achieve

objects that neither alone could achieve”.16 Such cooperation

may relate to the exercise of legislative, executive or

judicial power. Importantly, and in addition to the specific

co-operative arrangements 12 for which the constitution

provides, there is a record of intergovernmental agreements

between the Commonwealth, the States and the self-governing

territories to deal with national problems which need to be

attacked by legislation from each of them. Such agreements

form the political foundation for schemes of complementary and

interlocking legislation by all the polities concerned.

4.3. Mechanism of Co-operative Federalism under Australian

Constitution

Specific mechanisms of co-operative federalism in Australia

include:

1. Intergovernmental agreements providing for:

16 Deputy Federal Commissioner of Taxation (NSW) v WR Moran Pty Ltd (1939) 61 CLR 735 at 774 (Starke J).

22

– uniform legislation enacted separately by each

participating polity;

– interlocking legislation by Commonwealth, State and

Territory parliaments which may involve adoption of a standard

law enacted by one polity.

2. Delegation of legislative power:

– by the Commonwealth under the territories’ power;

– by the Commonwealth under section 51(xxxviii) of the

constitution.

3. Referral of State legislative power to the Commonwealth on a particular subject or

to support a particular statute.

4. Executive cooperation.

All Australian governments – federal, state and local – share

a responsibility to make our federal system work effectively

for the benefit of all Australians.17

17 COMMON CAUSE: STRENGHENING AUSTRALIA’S COOPERAIVE FEDERALISM by PROFESSOR JOHN WANNA, AUSTRALIA AND NEW ZEALAND SCHOOL OF GOVERNMENT, PROFESSOR JOHN PHILLIMORE, PROFESSOR ALAN FENNA WITH DR JEFFREY HARWOOD JOHN CURTIN INSTITUTE OF PUBLIC POLICY, CURTIN UNIVERSITY OF TECHNOLOGY at pp.4-5

23

COMPONENTS OF COOPERATIVE FEDERALISM18

PRINCIPLES

LEGAL AND

INSTITUTIONAL

ARRANGEMENTS

CULTURAL PRACTICES

KEY

COMMITMENTS

A commitment to

supporting the

best practice

principles of:

• Subsidiarity –

proximity of

government to

the community

• Alignment of

responsibilitie

s – the

allocation of

roles and

responsibilitie

s to the level

of government

with the

corresponding

geographical

scale

• Cooperation –

engagement and

A commitment to

developing new

inter-

jurisdictional

institutions and

an improved

cooperative

federalism

architecture:

• Legal mechanisms

to facilitate

cooperation –

including referral

of powers,

‘mirror’

legislation and

complementary

legislation to

harmonise laws

• Institutional and

administrative

arrangements to

A commitment

to improving

processes and

realigning

organisational

cultures to

improve

cooperative

federalism:

• Removing

barriers to

cooperation –

including

allegiances,

loyalties and

‘silo’

mentalities of

State and

Territory-

based

jurisdictions,

agencies and

18 1bid

24

cooperation

between the

levels of

government,

including the

comity

principle

facilitate

horizontal

cooperation

(between States

and Territories)

and vertical

cooperation

(between States,

Territories and

the Commonwealth)

professions

• Responding

nationally –

‘joining up’

systems and

programs to

tackle complex

and cross-

sectoral

problems,

improve

integrated

service

delivery and

set common

goals and

objectives

PRINCIPLES

LEGAL AND

INSTITUTIONAL

ARRANGEMENTS

CULTURAL PRACTICES

25

AREAS FOR REFORM • CAF should develop

a forward agenda to

facilitate

horizontal

cooperation,

including

identifying

opportunities to

harmonise laws and

to share policy

innovation and best

practice initiatives

• COAG and its

operations should be

formalised through

an Intergovernmental

Agreement

• The relationship

between COAG and

Ministerial Councils

should be clarified,

with the latter

undertaking greater

community engagement

• Governments should

give consideration

to establishing

innovative, purpose-

• State and Territory

governments should

explore various ways

to develop and

sustain cooperative

and collaborative

cultural practices

• CAF should consider

undertaking a

project to identify

current successful

collaborative

cultural practices

and to develop best-

practice models

and/or guidelines

for such practices

26

built bodies where

required to drive

reforms

• The five year

review of the IGA on

Federal Financial

Relations should

consider how to

provide better and

more transparent

resource deployment

within the

Federation

• The Commonwealth

should work with the

States and

Territories to

consider and propose

constitutional

reform to promote

cooperative

federalism,

including

facilitating

cooperative

legislative schemes,

providing a role for

the States and

27

Territories in

appointing High

Court judges and

giving States and

Territories the

opportunity to

initiate referenda

4.4. Benefits of Reform

o Checking the concentration of power at any level of

government

o Providing greater choice and flexibility for citizens,

provide greater diversity of policy provisions and allow

greater customisation of policy to suit local needs

o Allowing greater scope for innovation in implementation

strategies and delivery systems

o Encouraging competition between jurisdictions in the

provision of quality services and policy provisions

o Enhancing creativity and innovation among governments and

policy delivery networks.

CAF :Council for the Australian Federation

COAG : Council of Australian Governments

4.5. Co-operative Federalism in India

28

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.

4.5.1. Co-operative Federalism under Indian Constitution

          There has been a felt need for a change from

competitive to cooperative relationship in the working of the

29

federal constitution. Cooperative federalism means that the

centre 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 means 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

goals19.

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.

4.5.2. Full Faith and Credit Clause

19 Corwin defines co-operative federalism thus: “The States and National Governments are regarded as mutually complementary parts of a single governmental mechanism all the whose powers are intended to realise the current purposes of government according to their applicability to the problems in hand.”THE CONST. OF THE U.S.A., SENATE DOC., 14 (1953).

30

The several States in the U.S.A., before the creation of

the Federation. Were sovereign entities and each was thus free

to ignore the obligations created under the laws, or by the

judicial proceedings of the other. It was, therefore,

necessary to evolve a mechanism by which rights legally

established in one State could be given nation-wide

application, and so there is the Full Faith and Credit Clause

in the U.S. Constitution.20 On the same model, the Indian

Constitution has Art. 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 centre and the

states.

Clause (2) empowers the Parliament to lay down by law:

(a) the mode of proof, as well as,

(b) 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 20 Art. IV, Sec. 1; Corwin, WHAT THE CONST. MEANS TO-DAY, 199 (1973); JACKSON, Full Faith and Credit—Lawyer’s Clause of the Const., 45 Col. LR 1 (1945).

31

between the states and the centre and gives due credit to all

the public acts.

4.5.3. Inter State Council

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. Generally, it may be charged with the duty of:

(a) inquiring into and advising upon disputes which have

arisen between States.

(b) investigating and discussing subjects in which some or all

of the States, or the Union and one or more of the States,

have a common interest;

(c) making recommendations upon any subject and, in

particular, recommendations for the better coordination of

policy and action with respect to that subject.

In T.N. Cauvery Sangam v. Union of India21, 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 has again recommended the setting up

of an all-embracing Inter-State Council under Art. 263. Since 21 (1990)3 SCC 440

32

1967, parties or coalition of parties other than the one

running the Central Government, have come in power in the

states. These state Governments of diverse hues have different

views on regional and inter-state problems. In such a

situation, the setting up of a standing Inter-State Council

with a comprehensive charter under Art. 263 has become an

imperative necessity. The Council is to consist of the Prime

Minister as the Chairman, all State Chief Ministers and all

Union Cabinet Ministers dealing with the subject of common

interest to the Union and the States as members.22

The Council is to be a recommendatory body. It should be

charged with duties in broad terms embracing the entire gamut

of clauses (b) and (c) of Art. 263. The Council should have

such investigative, deliberative and recommendatory functions

as would fall within the ambit of cls. (b) and (c) of Art.

263.23

In 1990, in Dabur India Limited v. State of Uttar Pradesh24, the

Supreme Court suggested the setting up of a council under

Article 263 to discuss and sort out problems of central state

taxation.

4.5.4. Zonal Councils

In between the Centre and the States, 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

22 M P JAIN, INDIAN CONSTITUTIONAL LAW, 5TH EDN 2003, VOL 1 p. 83223 Report, 237-24124 AIR 1990 SC 1814

33

intergovernmental consultation and cooperation mainly in socio

economic fields and also to arrest the growth of controversies

and particularistic tendencies among the various States.25

There exists five Zonal Councils:

(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.25 LOK SABHA DEBATES, December 23, 1955, Vol. I, 880

34

A zonal council is an advisory body and has no executive

or legislative function to perform. The Sarkaria Commission

has expressed the view that the Zonal Councils have not been

able to fulfil their aims and objections. The commission has

recommended that these Councils be appointed under Art. 263 so

that they get the status of constitutional bodies functioning

in their own right. The meetings of the Zonal Council should

be held in camera and at regular intervals, in any case not

less twice a year.26

4.5.5. River water Disputes

India has a number of inter-State rivers and river

valleys. The Constitution makers anticipated that with the

accent on development of irrigation and power resources, some

inter-State disputes would arise regarding sharing of river-

waters. The waters of an inter-State river pass through

several states. Such waters cannot be regarded as belonging to

any single riparian state. The waters are in a state of floe

and, therefore, no state can claim exclusive ownership of such

waters. No state can legislate for the use of such waters

since no State can claim legislative power beyond its

territory.27

Article 262(1) 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.28

26 Report, 240-24327 In Re Cauvery Water Disputes Tribunal, AIR 1992 SC 52228 See under entry 56, List I

35

Under Art. 262(2), Parliament may also provide that,

notwithstanding anything in the Constitution, neither the

Supreme Court nor any other court shall exercise jurisdiction

in respect of any such dispute or complaint. Art. 131 provides

for the decision of inter-State disputes by the Supreme Court,

but Art. 262 provides that the class of disputes mentioned

therein may be excluded by Parliament from the purview of the

Supreme Court.

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.

4.5.6. 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

36

augmenting such of these resources as are found to be

deficient in relation to the nation’s requirements;

(2)       to formulate a plan for the most effective and

balanced utilization of the country’s 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.

4.5.7. National Development Council

The National Development Council was established in 1952

in order provide a mechanism to give sense of participation to

37

the states in the planning processes. It consists of the Prime

Minister, the State Chief Ministers, representatives of

the Union Territories and members of the Planning Commission.

In October, 1967, the 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 (NEDC)

and be constituted under Article 263. The NEDC will then have

adequate flexibility and a measure of authority as it will

have the constitutional sanction.29

4.5.8. Other Statutory Bodies

A number of statutory bodies have been set up for

promoting Centre-State co-operation and co-ordination. A few

of these are below.

4.5.8. (a)   University Grants Commission:

A body of great importance in the field of university

education is the University Grants Commission. According to 29 On Planning, see, REPORT OF THE SARKARIA COMMISSION, 361-388

38

the Constitution, university education is a concurrent

subject, but co-ordination and maintenance of standards in

this area is a Central charge, and it is to fulfil this

function that Parliament has created the Commission under the

University Grants Commission Act, 1956. It gets its funds from

the centre only. It grants fund both for maintenance and

development to central universities while only for maintenance

to state universities.

4.5.8. (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.

4.5.8. (c)   Damodar Valley Corporation: The Damodar Valley

Corporation, a joint enterprise of centre and the two states

of Bihar and West Bengal, has been established under a Central

law enacted under Art. 252 to  develop the inter-State valley

of the Damodar River for irrigation, power and flood control.

The Corporation consists of three members appointed by the

Central Government in consultation with the two State

Governments. In discharging its functions, the corporation is

to be guided by instructions issued by the Centre on questions

of policy.

4.5.8. (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

39

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.

4.6. 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 centre’s development plans. The grants are

given under the provisions of Article 282. These grants are

provided for the implementation of the centre’s 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.

40

          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 fulfill 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.

4.7. Position in other Federations

          The exigencies of war and financial crisis have lead

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 inter governmental

cooperation.

41

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.

4.8. India emerging into a “Cooperative Federation”

Single citizenship, All India Civil Services, Unified

Judiciary, single Election Commission, the Finance Commission,

and the Planning Commission also establish the unitary

character of our constitution. Indian Constitution is not

laissez faire federal Constitution. Paras Diwan, an eminent

law writer said in his book,30 “It is essentially a cooperative

federation, where two sets of governments are not

antagonistically independent of each other but coordinate,

cooperate and collaborate in each other’s efforts “to secure

to all its citizens justice, social, economic and political,

liberty of thought expression, belief, faith and worship:

equality of status and of opportunity: and to promote

fraternity assuring the dignity of the individual and the

unity and integrity of the Nation.”(Preamble of the Indian

Constitution)

Paul Appleby31 calls the Indian Constitution as extremely-

federal. The so called autonomy of the states appears to be a

myth or practically impossible in certain circumstances. The

biggest threat to the autonomy of the states is the provisions

30 “Indian Constitutional Law p 631 As quoted by H.M.Seervai in his book “Commentaries on Indian Constitutional Law”

42

like Article 356. The Sarkaria Commission which probed into

the centre and state relations suggested exhaustive measures

to improve the state autonomy and strengthen the cooperative

federalism, the basic concept of our constitution. With the

advent of regional parties gaining popularity with their

relentless fight against the misrule by Central Governments

ignoring the needs of some states, the demand for more powers

increased. The unitary features of the Constitution are coming

under the constant attack from the states, which are asking

for more share in tax revenue and legislative powers.

5. 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 centre 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 centre 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 ofArticle 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 thecreation of various councils which work for the benefit of the

43

states as well as the centre and also by giving full credit toall the acts throughout the territory of India.

5.1.Suggestions

          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 centre 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 thecountry 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 centre and the states.

44

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The Constitution of the United States 1789

45

Commonwealth of Australia Constitution Act. 1900 THE CONSTITUTION OF INDIA, 1950

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2009. Datar P Arvind on the Constitution of India, 2nd edition.

Reprint, 2010. Jain M.P., Indian Constitutional Law, 6th edition. 2010.

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