Tuesday, September 30, 2008

Federalism at Stuck

Exactly two years ago I had attended a Conference at Srinagar organized by ISS. What I was felt after the conference was that all sort of “isms” are becoming stuck.

Here is evidence from expert who writes in Economic Times “After 2000 which brought both corporate and customs duties within the divisible pool of taxes the amount to be shared with states was increased from 29.5% to 30.5% by the XIIth Finance Commission for the period 2005-2006 to 2009-2010. However, as pointed out by other analysts, the Union receipt budget suggests the devolution over the past five years has never exceeded 26% and in fact it has gone down from 28.2% in some earlier years to 26%. Substantial accruals arising from surcharge, cess and non-tax revenue have been kept out of the divisible pool. This has resulted in by-passing the recommendations of the Finance Commission to the disadvantage of the states. The Finance Commission need to ensure that governments implement what they accept in letter and spirit. There is the need for greater transparency and a redressal mechanism for the states”.

No matter how the road commission’s recommendation has gone beyond the spirit! This one proof is enough to say federalism is becoming stuck.

No comments: