3 weeks ago

Are Finance Commissions Undoing India's Constitutional Federal Design?

Are Finance Commissions Undoing India's Constitutional Federal Design?
Fiscal federalism at risk: are Finance Commissions undoing a grand design of the Indian Constitution? · livemint.com

In India, there are three levels of government: the national government, state governments, and local village and city governments.

A special group called the Finance Commission decides how money is shared between these levels.

The 16th Finance Commission has decided to give a huge amount of money — ₹791,493 crore — straight to local village and city councils.

Normally, this money might first go to the states, which then pass it on.

Some people think giving money directly to local bodies is good because local governments need funds to do their jobs.

Others worry that the national government is going around the states on purpose.

They say the grants come with many conditions that ignore local problems.

This could give the central government more power over local bodies.

The big question is whether this breaks the important balance of power written in India's Constitution.

Key facts

Finance Commission
16th
Direct grants to local bodies
₹791,493 crore
Grant recipients
Rural and urban local bodies
Country
India
Route of grants
Directly to local bodies, bypassing states
Reported grant conditions
Multiple strings attached, ignoring locational and social constraints
Core concern
Fiscal federalism and Centre control over local bodies

Sources

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