Towards a stronger federal framework

In a notification issued last week, the Center restructured the Inter-State Council, a constitutional body established in 1990 for better coordination of policy implementation between governments. The body, headed by Prime Minister Narendra Modi, comprises all the Chief Ministers, Union Territories Administrators, six Senior Union Ministers and 10 other Ministers. The body’s standing committee was also renewed, with Union Home Minister Amit Shah as chief and four union ministers and six chief ministers.

The council arose from discussions held during the Sarkaria Commission. Its primary solution was to create a corporate framework to promote cooperative federalism, manage disagreements between the center and the state, and monitor the implementation of the recommendations. Over the years, unfortunately, the council has rarely met. The restructuring of the panel may stimulate discussions to facilitate disagreements.

This move by the Center has come amid rising tensions between the Center and some states and the fiscal federalism framework under pressure. Competitive popularity is pushing central-state relations into an unrecognized area, and the issue of income-sharing differences is likely to deepen after the expiration of the Goods and Services Tax (GST) solution. As NK Singh, chairman of the 15th Finance Commission, argues, the inter-state board could be a key platform for managing central-state conflict through dialogue and setting the stage for the new federal compact. To achieve this, the council needs the cooperation and attention of the central and all states.

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