Tag: Cooperative Federalism

NITI Aayog’s Growth Hub Program a testimony of Strong Cooperative Federalism

 NITI Aayog delegation led by CEO, NITI Aayog held a meeting with the Chief Minister and the Deputy Chief Ministers of Maharashtra State along with senior officials of different State departments to discuss the potential of urbanization in the economic development of the country.

Urban areas hold immense potential to drive economic advancement to achieve the target of Viksit Bharat during the Amrit Kaal. It has been observed that the Gross Domestic Product (GDP) of several major city regions worldwide appears to match the GDP of entire countries. This intriguing trend reflects urban centers’ growing economic prominence and vitality, highlighting their pivotal role in shaping the country’s economic development. Indian cities also hold the potential to propel unparalleled economic growth which needs to be realised. While the government is exploring multiple pathways at all levels to achieve this target, strategizing \for transforming city regions into mega economic growth hubs is crucial.

Recognizing the importance of leveraging urbanization for economic growth and in line with NITI Aayog’s mandate of fostering Cooperative Federalism, an initiative focused on developing City-regions as Growth Hubs has been conceived. This initiative is a close collaboration of NITI Aayog with the State Governments and renowned subject experts. It endeavors to forge a robust economic growth strategy for city-regions across India and prepare a roadmap for achieving the same. NITI Aayog would also constitute a National Advisory Committee of renowned experts under this initiative.

In the initial stage, 4 city-regions will be taken up on a pilot basis to develop a template for devising an economic strategy. Later, it would be scaled up to 16 more cities. In addition to these, the economic strategy template will act as the model strategy for other city-regions across the country for achieving desired economic targets. Across each city region, the Project aims to deliver a roadmap for developing economic growth strategy. To achieve this, a series of activities will be undertaken including, a comprehensive baseline assessment of city region’s economy, SWOT analysis for understanding the strength and challenges of the region, identification of growth drivers, setting economic goals, designing policy enablers and proposing governance structure for projectization of the proposed strategies. The initiative is expected to support the country to achieve $35-$45 trillion Economy Target by 2047.

So far, Mumbai, Surat and Vishakhapatnam have been identified for the pilot phase. Under the priority of achieving trillion dollar aspirations of Maharashtra state economy, Mumbai Metropolitan Region (MMR) needs to strengthen the economic footprint in a sustainable manner. NITI Aayog will assist the Maharashtra State Government in developing a high-level roadmap to achieve 300 billion GDP from the current 140 billion for the MMR region. A State level committee comprising senior officials of relevant departments would also be formed to support the execution of the initiative. During the discussion, NITI Aayog team presented a set of 10-15 marquee investible projects with investment aspirations of $150 billion by 2030. These economic growth drivers will be selected based on the city’s endowments. Examples of the projects include an integrated Aerocity near the New Mumbai airport, US Silicon Valley type Artificial Intelligence hub, a global medi-city, developing Mumbai’s eastern seaboard for culture, tourism, reinvigoration of SEZ land for select manufacturing and services, master planning bullet train stations such as Virar and Boisar.

 

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CO-OPERATIVE AND COMPETITIVE FEDERALISM

 

                                                              (Photo: YouTube)

India opted for quasi-federal structure after Independence. After Independence from 1947 to 1967, India experienced the centralized federalism. From 1967 to 1990, India witnessed confrontational federalism due to the emergence of other party governments at the state level. Since 1990, Co-operative federalism has been developed. The present NDA government has been focusing on the new concept of competitive federalism along with co-operative federalism for higher growth of the country.

In competitive federalism, states would compete with each other over a broad-range issues to provide citizens various services in a hassle-free manner. The policy of one-size-fit-all is replaced with different policies of various states based on their own priorities within the state. This spirit of competition has led to lack of inter-state mutual assistance. The NITI Aayog was formed to empower and strengthen the state governments. It also appointed regional councils to create cooperation among two or more states facing a common set of problems or amicably settle disputes.

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 proposed GST law may help some of the less productive states to raise the revenue. 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.

We’ve seen various inter-state water disputes such as Krishna water disputes involving Maharashtra, Karnataka and Andhra Pradesh, Narmada water disputes involving Rajasthan, Gujarat, M.P, and Maharashtra, Cauvery water disputes involving Karnataka, Kerala, Tamil Nadu, Puducherry, and various others. For this, under Article 263, an inter-state council was established. The Sarkaria Commission on center-state relations (1983-87) made a strong case for the establishment of a permanent inter-state council. Article 301 to 307 in Part 13 deals with the trade, commerce and intercourse within the territory of India, breaking all the border barrier between the states. Zonal councils have also been established in 1956 to narrow the gap between the states. Cases such as Cauvery water dispute and Sutlej Yamuna link canal issue have seen non-mutual assistance between the states to a wider extent.

Thus, it can be said that co-operative and competitive federalism are two sides of the same coin. This spirit of competition has led to the lack of mutual assistance between and among the states. It is competition with co-operation that will drive the real change.