Continuity with Change: Approach of the Fifteenth Finance Commission

Ajay Narayan Jha ()
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Ajay Narayan Jha: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: The two latest Finance Commissions - the Fourteenth Finance Commission (FCXIV) and the Fifteenth Finance Commission (FC-XV)- mark a break from the past. The paper explores the structural shift in federal finances with the abolition of the Planning Commission and contemporaneous circumstances that shaped the approach of the FC-XV and examines the intersections and divergence, continuity and change, with FC-XIV in terms of its treatment of and approach to the three core issues of vertical and horizontal devolution, grants-in-aid to the States and transfers to local governments. It argues that the pervasive impact of the pandemic has shaped the recommendations of FC-XV in several ways without compromising on the Constitutional principles and retaining the balance in federal transfers between the Union and the States and amongst the States. At a time when the growth prospects of the economy are uncertain, innovative use of targeted grants linked to performance-based criteria for specified sectors through the States and local governments address glaring gaps in public services and potentially trigger reform in critical sectors.

Pages: 20
Date: 2021-08
New Economics Papers: this item is included in nep-isf
Note: Working Paper 342, 2021
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Citations: View citations in EconPapers (1)

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