Towards a stronger federal framework

In a notification issued last week, the Centre reconstituted the inter-state council, a constitutional body set up in 1990 for better coordination of policy implementation between governments. The body will be headed by Prime Minister Narendra Modi and comprise all chief ministers, administrators of Union Territories, six senior union ministers, with another 10 ministers as permanent invitees. The standing committee of the body was also revamped, with Union home minister Amit Shah as the head, and four central ministers and six chief ministers as members.

The council was born out of deliberations during the Sarkaria Commission. Its primary remit was to create an institutional framework to promote cooperative federalism, manage disagreements between the Centre and states, and monitor the implementation of recommendations. Over the years, unfortunately, the council met infrequently. Reconstituting the panel may give an impetus to deliberations to smoothen out differences.

The Centre’s move comes at a time when tensions between the Centre and some states are rising, and the fiscal federalism framework is under stress. Competitive populism is pushing Centre-state ties into uncharted territory and the problem is likely to deepen over revenue sharing disagreements once the Goods and Services Tax (GST) compensation period ends. As argued by 15th Finance

Commission chairperson NK Singh, the inter-state council can be a key forum to manage Centre-state friction through dialogue and set the stage for a new federal compact. To achieve this, the council will need the cooperation and attention of the Centre and all states.