Blog Series on Fiscal Devolution

9 September 2016
Blog Series on Fiscal Devolution
By Accountability Initiative

Accountability Initiative (AI) released a series of blogs over the month of August, interpreting their research on fiscal devolution (State of Social Sector Expenditure 2015-2016) in response to the Fourteenth Finance Commission’s (FFC) recommendations to increase the fiscal autonomy of states.

AI studied 19 state budgets to come up with a first comprehensive analysis of the FFC recommendations and its implications for devolution, federalism, and social sector investments in India. Its blog series is highlighted below:

  • Winners and Losers: How the 14th Finance Commission Recommendations Impacted State Revenues: Avani Kapur analyses the impact of fiscal devolution to states and whether increase in tax devolution was offset by cuts in Centrally Sponsored Schemes. Read the full blog here.
     
  • What Has Changed for Centrally Sponsored Schemes (CSSs) in 2015-16: Yamini Aiyar discusses how the top down, one-size fit all model of Centrally Sponsored Schemes (CSS) gives little flexibility to states in implementing social policy related programmes, even as the CSS play an important role in ring-fencing money for social policy programmes. Read the full blog here.
     
  • The 14th Finance Commission (FFC) and Social Sector Spending: Vikram Srinivas and Avani Kapur analyse state budgets to discuss how states are using greater fiscal autonomy proposed under the FFC recommendations, and find that all states intend to spend more money on the social sector in 2015-16. Read the full blog here.
     
  • The 14th Finance Commission and the Way Forward in States: Vikram Srinivas and Priyanka Roy Choudhury write that for effective usage of money through decentralisation, states must ensure a detailed budgetary process and quality data to make informed decisions. This calls for both measures of capacity building and strengthening accountability. Read the full blog here.
     
  • The Future of Centrally Sponsored Schemes in the New Era of Devolution: Yamini Aiyar offers specific ways in which the CSS can be best structured to serve the needs of the states as the country adapts to a new era of fiscal devolution post the recommendations of the FFC. Read the full blog here.

AI also ran a tweetathon focusing on findings from six states (Maharashtra, Chhatisgarh, Rajasthan, Bihar, Karnataka, Tamil Nadu) out of a total of 19 state budgets studied, which capture the key impacts of fiscal devolution on social sector investments and public service delivery. The full storification of the #PAISA2016 tweetathon can be accessed here.

A previous interview with the AI team contextualising their research on fiscal devolution can be found here.

The views shared belong to individual faculty and researchers and do not represent an institutional stance on the issue.