On Friday, the chairman of the 15th Finance Commission, NK Singh, advocated the creation of a committee of experts in the high-power domain to review the powers and functions assigned to the center and the states under the 7th Program of the Indian constitution. to keep up with changes in technology and national priorities. The 7th Program divides the subjects broadly into Union, State and the Concurrent list.
“Over a period of time, the division of functions eroded more and more. Perhaps the first reason would be the constitution of the Planning Commission in 1951. Another reason is the change of topics like forest and education from the State to the Concurrent list by the 42nd Amendment of the Constitution, which significantly changed the dynamics. Some examples in the current context are the Mahatma Gandhi National Rural Employment Guarantee Law of 2005, the Right of Children to Free Freedom and the National Law of Food Security of 2013. Therefore, we must review the VII Program of the Constitution in a more fundamental way. ”Singh said.
Singh said that these national priorities understandably span a number of areas in which the federal government has taken initiatives such as education, healthcare, electricity and infrastructure, to name a few. “This committee of high-powered experts should not only be made up of parliamentarians and legal luminaries, but also experts with domain knowledge of economists, academics, policy makers and others involved in the implementation of national priorities,” he proposed.
Singh said that India’s economic progress, global interdependence and seamless integration through technology have legitimately reopened many of these established contours for further deliberation. “Many have argued that trust between various forms of government is waning. Are there new seeds of suspicion and mistrust? Are the existing agreements governing the relations between the center and the state – legislative, executive and financial – provided for in the Constitution adequate to meet the aspirations of Indian society? A society that is changing rapidly as it becomes more integrated both nationally and internationally, “he said.
Singh advocated for further streamlining of centrally sponsored schemes by revising article 282 of the constitution to make them flexible enough to allow states to adapt and innovate. Total public expenditures in these centrally sponsored schemes are close to ₹6-7 trillion per year with the central government spending more than ₹3.5 trillion, which is 1.2% of GDP.
“There have been successive attempts to streamline these plans, the latest under the Committee headed by the former Chief Minister of Madhya Pradesh, Shivraj Singh Chauhan. However, their numbers and diversity remain very strong. Based on the internal exercise of the Fifteenth Finance Committee, there are approximately 211 schemas / sub-schemas under the 29 umbrella core and the core schemas core. Many of these exist masked under the so-called general schemes. Considering that states often protest because these schemes are poorly designed, do not adapt to their specific needs and involve significant financial outlays from them, no state has really decided to abandon them, “he added.
Singh said the symmetry in the work of the GST Council and the Finance Commission deserves serious consideration. “The Finance commissions recommend the distribution of income between the Union and the States and, subsequently, between the States beyond the third level. They look at projections of expenses and income, but the issues of GST rate exemptions, changes and the application of indirect taxes are entirely within the domain of the GST Council. This leads to unresolved questions about ways to monitor, scrutinize, and optimize revenue results. Since both the Finance Commission and the GST Council are constitutional bodies, the coordination mechanism between the two is now an inescapable necessity, “he added.
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