NINTH FINANCE COMMISSION S AWARD IV-Some Conceptual and Methodological Comments

Some Conceptual and Methodological Comments M Govinda Rao The Ninth Finance Commission has broken new ground in some respects. In particular, the attempt at linking transfers to offset the fiscal disadvantages of states is noteworthy. However, the commission has missed the opportunity to make an integrated assessment of the revenue accounts of the states. The continued adherence to the compartmentalised approach to assessing the plan and non-plan sides of the states' budgets is clearly a disappointment Also, it is doubtful that the states and the centre will adhere to the plan of phasing our revenue deficits. While non-adherence by the states will largely reduce their investments, that by the centre will hurt the economy as a whole.