Topic Details (Notes format)

Cooperative Federalism and Economic Coordination

Subject: Economics

Book: Comprehensive Indian Economy

Cooperative federalism stresses collaborative relations between the Union and states, moving beyond rigid hierarchical structures. Institutions like the GST Council exemplify joint decisions on tax rates, fostering consensus-based reforms. Similarly, NITI Aayog hosts forums where states share best practices, aligning policies across sectors (health, education). For exam prep, highlight how effective federal coordination can tackle large-scale issues like water disputes (inter-state rivers), infrastructure connectivity, and investment promotion. Conversely, debates arise when central directions conflict with state autonomy. A nuanced answer shows how synergy or friction in federal relations shapes overall economic outcomes.

Practice Questions

Which of the following measures is most effective in controlling inflation?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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Which of the following is an example of a capital receipt for the government?

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What is the primary goal of a progressive tax system?

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Which of the following is a direct tax?

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What is the meaning of “supply-side economics”?

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What is meant by “marginal propensity to consume”?

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Which of the following measures can reduce a trade deficit?

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What does the term “elasticity of demand” measure?

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What does “Laissez-faire” policy advocate?

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