UPSC Mains 2015 GS Paper 2 Q2: model answer

On 1 January 2015 the Planning Commission was replaced by NITI Aayog, with every Chief Minister in its Governing Council. A month later the 14th Finance Commission raised the States' tax share from 32% to 42%. 'Cooperative federalism' became the government's phrase.

Drawbacks in the structure

• Fiscal mismatch: States spend about 60% of government money but raise far less.
• Tied money: centrally sponsored schemes dictated State priorities.
• Dormant forums: the Inter-State Council met only 11 times since 1990.
• Governors and Article 356: seen as the Centre's agents.
• Indirect tax chaos: different VAT rates and check posts.

How cooperative federalism helps

• NITI Aayog gives States a seat at the planning table instead of a begging bowl.
• Higher untied devolution lets States choose.
• The proposed GST Council (enacted 2016) would pool tax powers with joint voting.
• Rationalisation of centrally sponsored schemes by the CM sub-group (2015).

The limits

• NITI has no money to give, so its pull is weak.
• Cesses and surcharges, outside the divisible pool, have grown.
• Cooperation depends on politics; it works when parties agree.

Assessment

It answers the fiscal and planning gaps well, the political gaps poorly. Institutional fixes like a regular Inter-State Council are still needed, along with regular meetings of the zonal councils. Cooperation cannot be only a slogan; it needs a table that meets, a fixed agenda and a record of decisions.