Co-Opted Federalism? Border States and Resource Revenue Sharing Bargains

19 October 2016

A growing international engagement by border states today has the scope to frame the terms of India’s evolving engagement with its subregional neighbourhood. These hold the potential to recognise the local actor as a critical stakeholder on a range of transborder issues such as trade, energy, environment, land use and transport. Many of these questions will also hold increasingly tricky implications for resource revenue sharing for India, domestically and subregionally. Prime Minister Narendra Modi has articulated the idea of cooperative federalism calling for a ‘new partnership’ between the Centre and the states. But for all its feel-good appeal, it will take more than just rhetoric to get there. Are there effective ways to link fiscal federalism with resource revenue sharing?