Question 14GS2GS2
In India, the Finance Commissions are established pursuant to the Constitutional mandate. In this context, do you think the State Finance Commissions have been effective in promoting fiscal federalism? Substantiate with arguments.
Main Body
State Finance Commissions were created post 73rd & 74th Constitutional Amendment Act (Article 243J)
Effective in promoting fiscal federalism:
1Advise State Govt in financial devolution and taxation grants to local govt
2Determine distribution principles between Panchayati & urban local bodies
3Coordinate with Central Finance Commission to augment State resources for local bodies fundy
4Submit reports to Governor visited as presented in State Assemblies ensures accountability
However, their effectiveness is challenged:
1Lack of regular & periodic report submission in several States
2No power to issue binding orders
3Rejection of recommendation by State Govt
4Decreased state finances reducing scope of further devolution
5Unable to create alternate ways of funding local Govts
6Mandatory presentation report with Action Taken Report (CATR) using Assembly Committee
7Innovative models-collaborate with Central Niti Aayog
8Inclusion of private sector to enhance resources
9Pursuing devolution of taxation on Eleventh & Twelfth Schedule items
10Fund allocation following principles of women & vulnerable sector empowerment
State Finance Commissions are backbone of financial autonomy of local Govt.
178 words3 paragraphs
Conclusion
State Finance Commissions are backbone of financial autonomy of local Govt.
11 words
Examiner score
1.2/10Open original scan
Page 31
Topper
Aayushi Bansal
AIR 72022
Subject & Paper
GS2GS2
Topic
Federal Structure - Functions, Responsibilities, Devolution of Powers and Finances
Centre-State Financial Relations
State Finance Commissions
Writing Stats
189
Total words
3
Paragraphs