Towards India’s new fiscal federalism

Vijay Kelkar gave Prof. Sukhamoy Chakravarty Memorial Lecture at the 55th Annual Conference of The Indian Econometric Society (TIES). TIES was organised by Mumbai School of Economics and NISM. The program looks quite interesting and hopefully they also put up papers overtime.

Good to see NIPFP put up Mr Kelkar’s talk as a working paper where he talks about India’s new fiscal federalism. He argues to bring back Planning Commission’s role to address state imbalances (horizontal) in development in today’s Niti Aayog. He also argues for a single GST rate of 12% with 2% of the resources marked for the third tier of oue governance: elected local bodies.

Summary:

In conclusion, I have discussed the issue of the need to revisit the fiscal federal architecture in contemporary India. Briefly tracing the origin of arrangement in
contemporary history, I have attempted to point out the changing political- economic parametric environment calling for commensurate change in the way our fiscal federal setup ought to be conceptualised, here and now. In doing this, I have identified some of the important issues that arise as we move forward. I have also suggested innovative reform proposals towards creating Four Pillars- based architecture for India’s new Fiscal Federalism. While the final resolution of these matters will be attained through a dialectic that will play out in the domain of realpolitik, it is important that such a process be helped along by evidence based analysis and debate. It is my strongest possible hope that this lecture will contribute to such a debate on the issues which are so vital to our country. I should say that  in these debates, this society and its members should play a fulsome role.

Useful stuff…

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