Question 13GS2GS2
The restrictions imposed under Article 293 of the Constitution on State borrowing powers, though constitutionally valid, may hinder fiscal autonomy of States and disrupt cooperative federalism. Discuss in the light of recent developments. (Answer in 250 words)
Introduction
India's Federal status gets reflected in Article-1 → India i.e. Bharat shall be a 'union of states'. This federalism goes into the fiscal sphere too.
25 words
Main Body
# Article-293imposes certain restrictions on the borrowing powers: istate cannot borrow unless they got Centre's approval. iiRestriction of external borrowings by states. Constitutionally Validas they seek to promote fiscal prudence oversight.
But it leads to certain complexities for Indian federalism. # It Hinders Fiscal Autonomy of states as1) Nearly 60% of the spending happens at state levelin health, education, police etc. 2) Yet states heavily dependent onFinance, Central Commission Grants and devolution, Aid. [44% of total] 3) This issue greater exacerbated by GST rolling outlimiting the taxation powers of states. # It disrupts cooperative federalism1) Leads of Confrontational federalism. 2) Centre-state disputes on rise: EWS Opposition ruled states allege centres discrimination towards them. 3) Greater centralization Tendencies violate 'Principle of subsidiarity' (2nd ARC)Centre not willing to devolve to states and further states not willing to devolve to local bodies.
4Promote fiscal federalism → Inclusive GST council working → Flexible Grants and aids. → iii) Recent developments: EWS Tussle for funds between Tamil Nadu and centre. → highlights the need to have the approach of 'SABKA SATH, SABKA VIKAS, SABKA VISHWAS, SABKA PRAYAS'.
203 words1 paragraphs
Topper
Rasneet Kaur
AIR 51
Subject & Paper
GS2GS2
Topic
Federal Structure - Functions, Responsibilities, Devolution of Powers and Finances
Centre-State Financial Relations
Article 293 and State Borrowing Powers
Writing Stats
228
Total words
1
Paragraphs