Question Q.5GS2GS2
The role of State Finance Commissions in building regional equity and strengthening the federal link has largely been underutilized. Discuss.
Main Body
73rd Constitutional amendment act provided for constitution of state Finance Commission to determine the financial devolution to local bodies. Role in regional equity: Grants to underdeveloped regions, strengthening federal link, Devolution of finances. Largely underutilized 1) Tied nature of grants: through central/state scheme hence no financial autonomy
2Lack of performance based grant 3) Inability to nudge panchayats to impose taxes 4) No side independent monitoring mechanism to ensure acceptance of recommendations 5) Overall total percentage of devolution remaining low 6) Lack of strong ground-based performance appraisal team for Panchayat Measures needed: Discretionary grants, Incentives to local bodies paying tax revenue, Free flow of funds, Training of village bureaucracy
109 words1 paragraphs
Topper
NISHCHAL JAIN
AIR 1192025
Subject & Paper
GS2GS2
Topic
Federal Structure - Functions, Responsibilities, Devolution of Powers and Finances
Centre-State Financial Relations
State Finance Commissions
Writing Stats
109
Total words
1
Paragraphs
analytical
Tone