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

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Politics of Planning in Post-independent Bangladesh

Untranquil Days: Nation Building in Post-Liberation Bangladesh by Rehman Sobhan, New Delhi: Sage, 2021; pp 384, ` 444.

The Role of Finance Commissions in Intergovernmental Fiscal Management

Fiscal imbalances, both vertical and horizontal, are common to federations and India is no exception. The Indian Constitution provides for instruments—shared taxes and grants-in-aid—to address such imbalances and an institutional mechanism—the finance commissions with specified terms of reference—to negotiate such imbalances. The paper addresses how 14 different FCs have dealt with their constitutionally assigned roles and strengthened the fabric of fiscal federalism in India. It further examines how the role of FCs were enlarged with additional terms in the interest of sound finance. It discusses, as an illustration, how FCs have addressed one of the major fiscal concerns, restoring budgetary balance and maintaining macroeconomic stability in the economy.

Fifteenth Finance Commission’s Recommendations on Local Bodies

The Fifteenth Finance Commission recommendations on local bodies, particularly those relating to urban local bodies, are a dampener. The recommendations lead to an anomalous situation of a least urbanised state getting higher per capita urban grants. Similarly, the segmentation of urban grants into too many components and very rigid conditions leaves a big question mark on grants utilisation.

Indian Fiscal Federalism at the Crossroads

The abolition of the Planning Commission, the creation of the NITI Aayog, the constitutional amendment to introduce the goods and services tax, the establishment of the goods and services tax council, and the historically high tax devolution to the states based on the Fourteenth Finance Commission have changed the union–state fiscal relations fundamentally. The changing contours of union–state fiscal relations discussed in the context of the release of a recent book Indian Fiscal Federalism by Y V Reddy and G R Reddy are presented here.

Fiscal Federalism and Regional Inequality in India

In all federal structures, the composing units are not self-sufficient financially. But, in India, the economic dependence of states on the centre is rather high because of widespread disparities in their levels of economic development. The federal transfers to the states through the Finance Commission, Planning Commission and centrally-sponsored schemes are investigated. The role of the union government in equitable direct investment, subsidy, and private investment policy for unbiased regional development is also underlined . The data proves that although the Finance Commission’s transfers are progressive, the share of devolution for low-income states is gradually decreasing. Unfortunately, all other transfers and efforts by the centre are regressive to address the regional inequality issues.

The Next Stage of Planning in India

A close review of the Niti Aayog’s vision document vis-à-vis earlier plans and programme details offers valuable insights and suggestions on the real issues that India must face for inclusive growth.

Why Women’s Studies?

The dissolution of the Planning Commission and expiry of the Twelfth Plan has imperilled the futures of the centres for Women's Studies, and Study of Social Exclusion and Inclusive Policy across public universities in India. These centres were borne out of struggles for inclusion and continue to operate at the margins of the academic set-up. A critical appraisal of Women's Studies has been undertaken here to locate its relevance in contemporary times.

Evolving Centre–State Financial Relations

After the Fourteenth Finance Commission award, aggregate transfers as a percentage of gross domestic product has increased, while grants as a percentage of GDP has declined. The centre is resorting to cess and surcharges that are not shared with the states. This would mean denial of revenue to states, which goes against the spirit of the Constitution. Further, the states have a reduced untied fi scal space, with the union’s share in Centrally Sponsored Schemes in 2016–17 (BE) being reduced. Finally, in the absence of plan transfers, post 2017–18, the focus should be to develop a framework for non-fi nance commission grants to states which is predictable and certain.

Role and Functions of NITI Aayog

The architecture, engineering and management aspects of the new institution, NITI Aayog, will have to be crafted carefully, if it is to serve as an institution to impart dynamism to the developmental process in a harmonious manner. Its effectiveness will depend on how it charts out a course for itself. An important question is whether the Aayog will have influence when it does not have the power to give grants and does not have the powers to make plan allocations to different ministries and departments.

Political Economy of Indian Economic Policy

The Evolution of Economic Policy in India: Selected Essays by P N Dhar; Oxford University Press, New Delhi, 2003; pp 255.

Twelfth Finance Commission and Panchayat Finances

Some issues for the consideration of the Twelfth Finance Commission in regard to its task of making recommendations to augment the Consolidated Fund of the states in order to supplement the resources of panchayats and municipalities.

Obituary : M J Manohar Rao

A committed academic, M J Manohar Rao was the quintessential problem-solver, whether in life or in economics.

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