Mentors Comments:
- 1. Mention briefly, the provisions of the 15th FC ToR
- 2. What challenges do they pose for federalism?
- 3. How to rectify the same?
- https://indianexpress.com/
article/opinion/columns/india- five-trillion-economy-nirmala- sitharaman-pm-modi-gdp- 6124752/
Answer:
Fiscal relations in India between the union and state governments have undergone significant changes in recent years. The constitution of the 15th Finance Commission (15th FC) and the formulation of its Terms of Reference (TOR), has led to discussions and debates that followed have highlighted many important issues on the very nature of union-state fiscal relations
- The terms of reference (ToR) of the 15th Finance Commission indicates its push for centralisation and control over state governments.
- Apart from other controversial features of the ToR, such as those relating to the use of the population base, it involved several points that directly infringed on the policy autonomy of state governments.
- For example, the commission is supposed to recommend a fiscal road map for “sound fiscal management”, but there is no mention that this should be consistent with “stable and equitable growth”, as it was for previous FCs.
- Also, for the first time ever, the FC is to examine “whether revenues deficit grants should be provided at all” for state governments.
- The ToR asks the FC to judge the performance (only for the states, not for the Centre) of fiscal progress according to various indicators such as increasing capital expenditure, eliminating power sector losses, increasing “savings” by adopting Direct Benefit Transfers, promoting digital economy etc.
- There are numerous problems with this characterisation, including the notion that subsidies (including food subsidies) should be seen only in terms of the fiscal costs and the associated “savings” should be celebrated even when they result from excluding beneficiaries.
- Another major departure from past practice is the requirement to review the recommendations of the 14th FC that increased the share of the states. Never before has a commission been asked to reconsider the decisions of a previous FC.
- ToR speaks of controlling “populist measures by the states”, which is not only arbitrary but also interferes directly in policy decisions by the states that may emerge from their democratic mandates and accountability to the people.
- The additional ToR says that the FC “shall examine whether a separate mechanism for funding of defence and internal security ought to be set up, and if so, how such a mechanism could be operationalised”.
- This amounts to a clear intrusion of the Centre into the limited fiscal space, by ring-fencing all expenditures related to security from the divisible pool of resources to be shared by the Centre and states, obviously reducing the share of states.
Way forward
- to make the FC a permanent body and expand its mandate to undertake the resource allocation role of the erstwhile Planning Commission.
- to revive the Inter-State Council as an effective federal decision-making body.
- need to arrive at an optimal mix of general and specific purpose transfers without violating the principles of fiscal sustainability at each level of government.
The Finance Commission’s fundamental task is fiscal equalisation across states. The principle of fiscal equalization tries to provide certain levels of resources to each state so that it will be possible to provide an equal provision of public services across all states.
Payment ID – MOJO9a25Y00D56176325
When making subheadings, highlight them prominently so that the examiner can gauge the direction of the discussion. The subheading should not be lost in the milieu of the discussion.
Therefore it should be highlighted properly.
Even when discussing things through paragraphs, do use subheadings to show the direction of the discussion.
The way forward could have been more specific with proper bullet points.
The rest of the answer is decent in the 1st part of the main body.
The language and explanation are decent there.
Always underline the imp stuff in your answer.
Godo writing
MOJO9a31K00N58111047
A very good intro.
The 1st part of the answer is well-directed but over-explained.
Try to make your bullet points smaller in length.
The 2nd part of the answer is missing.
Briefly discuss the points mentioned by the 15th FC while assuaging the fears of states.
Also, discuss the way forward in a better manner, rather than passing them off as your conclusion.
Underline imp stuff in your answers always
MOJO9903H00A58015579
A very good intro.
The structure of the answer is very good.
Your coverage is appropriate to demands of the question.
The content is well placed and well-explained.
The presentation style in the 1st part of the answer is very good.
Good language. It has improved quite a lot in recent times. Well done.
Fine way forward.
All in all, nothing wrong with the attempt.
Start writing answers on the UPSC Mains sample answer sheets to get better hold of the space that UPSC gives.
MOJO9930Q00N64198657
In terms of structure, the only issue is the missing conclusion.
Rest of the answer is well attempted.
The content is rich and exhaustive.
Well explained points.
The discussion is apt.
Start writing answers on the UPSC Mains sample answer sheets to get a better hold of the space that UPSC gives.
Payment ID:MOJO9b01O00A90839766
Please review
The 1st part of the answer is up to the mark.
The coverage there is decent with various apt talking points.
They are well structured and discussed with fine explanation.
The 2ns part needs more talking points in the way forward like:
-to make the FC a permanent body and expand its mandate to undertake the resource allocation role of the erstwhile Planning Commission.
-to revive the Inter-State Council as an effective federal decision-making body.
-need to arrive at an optimal mix of general and specific purpose transfers without violating the principles of fiscal sustainability at each level of government.
The presentation is very good due to the clarity in your writing.
Start writing answers on the UPSC Mains sample answer sheets to get a better hold of the space that UPSC gives.
MOJO9b03K00A07920521
Though the intro is decent, just mention a single statement towards the end regarding the topic of the question; which is TOR of the 15th FC. That will link your intro with the coming discussion in the main body. Intro should never be in a silo with the rest of the answer.
No need to discuss the functions of the FC. It is not aligned with the demand of the question
Before discussing the issues with the TOR, briefly discuss the salient aspects of the TOR in a separate subheading.
The discussion in the ain body is OK.
The content is deep and well discussed.
It is just that the 1st part of the answer suffers from lack of required content while discussing things which are not relevant to the answer.
That affects your structure as well.
Therefore read the mentors comments always before attempting the questions.
The language is decent
Good way forwards