ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles By T M Thomas Isaac

Fifteenth Finance Commission Award for 2020–21

The first report of the Fifteenth Finance Commission has allayed many fears that arose after the notification of the terms of reference of the commission. The main report for the period 2021–22 to 2025–26 will have to factor in the devastating impact of COVID-19 on the economy and provide adequate fiscal space to the states for socio-economic response and recovery.

COVID-19, Public Health System and Local Governance in Kerala

Kerala has been successful in containing COVID-19 and in achieving a low rate of spread, high recovery, and low fatality. The importance of the public health system, social capital and the active involvement of the people through local governments that played a significant role in Kerala’s success is highlighted. A brief historical review of the evolution of public health system and local governments in Kerala is also attempted.

Challenges to Indian Fiscal Federalism

The state of cooperative federalism in India is analysed by focusing on the trends in vertical fiscal imbalances between the centre and the states, the impact of Fiscal Responsibility and Budget Management acts on the fiscal space of the states, the implications of the Terms of Reference of the Fifteenth Finance Commission, and the need for empowering local governments in the context of centre–state relations.

Intergovernmental Transfers: Disquieting Trends and the Thirteenth Finance Commission

The way in which the terms of reference of successive finance commissions have been framed, including that of the Thirteenth Finance Commission, has diluted the basic constitutional rationale of having such a statutory commission. Various deficiencies in the transfer system require correction not through a heavy reliance on tied and conditional grants (as we have seen in recent years), but with an alternative approach which accommodates and protects the objectives of equity, efficiency and autonomy of the recipient state governments.

Why Do the States Not Spend?

This paper investigates the unusual phenomenon of state governments currently maintaining large cash balances even as many important sectors call for substantial outlays. Is it a governance issue, as the union finance ministry makes it out to be, or is it something more fundamental affecting the fiscal powers of state governments? We argue that the constraint on expenditure is imposed by the Fiscal Responsibility and Budgetary Management Acts passed by the centre and most state governments; the cash surplus phenomenon is a perverse outcome of such legislation. This essay also investigates the price paid by Kerala, an outlier where receipts do not keep pace with expenditure growth, because of the mechanical constraints imposed by the fiscal responsibility legislation.