Examine the role of NITI Aayog in fostering cooperative federalism with reference to its recent frameworks for State-level planning in frontier technologies.

Cooperative federalism means the Centre and States governing together through agreement rather than command. NITI Aayog replaced the Planning Commission in 2015 without its power to allocate funds. It has since moved from top-down planning to acting as a knowledge partner to States. Its Frontier Tech Hub's Data Centre Evaluation Framework (October 2026) shows this role clearly [1].

How NITI Aayog fosters cooperative federalism

• It advises rather than regulates. The Framework is a decision-support tool for State governments. It gives guidance "without creating an additional layer of regulation" [1].
• It respects the Seventh Schedule. Water and land are State subjects and electricity is on the Concurrent List. Because the Framework is only advisory, States keep the final decision.
• It brings the Centre, States and industry together. It was built with inputs from MeitY, the Ministry of Power, DPIIT and industry [1]. The Hub presents itself as a partner to States on emerging technologies, working towards Viksit Bharat@2047 [2].
• It sets common planning standards. There are five pillars: Power & Energy; Water & Cooling; Siting & Environmental Sustainability; Economic & Strategic Value; and Policy, Governance & Implementation. Together they move States "from investment attraction to investment readiness" [1].
• It builds State capacity. Measures such as net grid draw, basin-level water stress and time-bound approvals help States handle fast growth. Data-centre capacity grew from about 375 MW in 2020 to about 1.5 GW in 2026 [1].

Limitations

• States do not have to follow it. At least 15 States run competing data-centre policies that offer similar tax exemptions and single-window clearance [3]. This risks a race to the bottom.
• The Centre sends mixed signals. The Budget 2026–27 tax holiday till 2047 for foreign cloud providers has conditions about company structure, not outcomes [4]. Yet NITI asks States to link incentives to measurable outcomes [1].
• Key data is missing. States do not routinely collect data on how much water data centres use [5]. Without it, the basin-level water test is hard to apply.

Way forward

• States should write the five pillars into their rules for land allotment and power connections. They should give smaller incentives for colocation and larger ones for active compute [1].
• MeitY already notifies eligible facilities [4]. It could make yearly reporting of power and water use a condition of notification.
• NITI should publish State-wise readiness scores, adding healthy competition between States to cooperation.

NITI Aayog's frontier-tech frameworks show cooperative federalism moving from sharing funds to sharing knowledge. If States adopt them, scores are published openly and Central incentives are aligned, such tools can make States co-designers of India's AI infrastructure. This would advance the "Team India" approach, SDG 9 and Viksit Bharat@2047.