Dear Nagraj, Any sensible observer would knows that these are precisely the things to be expected of Modi as the PM which makes him the very darling of the corporates.
Panagariya and, his mentor, Bhagwati are just the high priests meant to sanctify the unfettered loot of the large capital, and too keen to "serve" Modi. There is hardly any element of surprise here, unless of course one is just blind to the recent developments. Sukla On 3 May 2014 20:23, Nagraj Adve <[email protected]> wrote: > I can't believe this moron wants to disband the Planning Commission. And > he is going to be the next Economic Adviser or some such. > Nagraj > > > On 3 May 2014 18:43, Saurav Datta <[email protected]> wrote: > >> >> http://m.timesofindia.com/home/opinion/edit-page/How-to-fiscally-empower-states/articleshow/34545668.cms >> >> >> >> >> >> <http://m.timesofindia.com/rssfeedsdefault.cms>[image: TOI MOBILE >> RSS]<http://m.timesofindia.com/rssfeedsdefault.cms><http://m.timesofindia.com/rssfeedsdefault.cms>3 >> May 14 1755hrs ISTFull site <http://timesofindia.indiatimes.com> >> >> [image: TOI MOBILE] <http://m.timesofindia.com/> >> ------------------------------ >> How to fiscally empower states >> >> May 3, 2014, 12.08AM IST [image: >> http://images.photogallery.indiatimes.com/images/spacer.gif][ Arvind >> Panagariya ] >> >> Reforms during 1991-2004 led to significant decentralization. The end to >> investment and import licensing, foreign exchange control and restrictions >> on foreign investment on the one hand and liberalized private entry into >> telecommunications, airline travel and banking services shifted the power >> to make investment decisions away from central governments to private >> entrepreneurs, opening the door wider to state governments to compete for >> investments. >> >> Beginning 2005 this process yielded, however, to recentralization. During >> the last 10 years the central government has turned ever more active in >> social sectors including education, employment, food and environment, >> claiming a larger and larger share of the policy space that the >> Constitution principally assigns to states. >> >> Today, one-size-fits-all Food Security Act, Right to Education Act and >> the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) >> determine the boundaries of what states can or cannot do in areas of food >> distribution, rural employment and elementary education irrespective of >> local conditions. The highly restrictive and slow process of environmental >> clearance has even partially resurrected the ills of investment licensing. >> >> Last month, i explained how the next government could return some >> legislative power back to the states. But recentralization has not been >> limited to legislative activity; it has also penetrated fiscal affairs. >> Expenditures on centrally-sponsored schemes (CSS) that inevitably accompany >> centralizing laws such as MGNREGA have proliferated, severely restricting >> states' fiscal space. >> >> A major part of states' fiscal resources comes from "transfers" from the >> Centre. The largest component of these transfers is tax devolution, whose >> allocation across states is based on the Finance Commission's >> recommendations. In 2012-13, taxes so devolved accounted for 61.2% of net >> resource transfers received by states. >> >> The remaining transfers come from a central budget that is divided into >> Plan and non-Plan expenditures. Out of non-Plan expenditures come non-Plan >> grants and loans to states, which amounted to another 10.8% of net resource >> transfers in 2012-13. All other transfers are from Plan expenditures, >> channelled through the instrumentality of the Planning Commission. These >> funds are principally for states' own schemes and projects as outlined in >> their state plans. >> >> CSS, which are entirely central initiatives, work towards undermining the >> fiscal space of states in at least three ways. First, larger the >> expenditure on CSS, smaller the resources left for transfers to states to >> cover expenditures on their own projects and schemes in the state plans. >> Second, the Centre requires states to contribute a pre-specified percentage >> of total expenditure on the vast majority of CSS, with this percentage >> varying across the schemes. >> >> Therefore, larger the expenditure on CSS, greater the demand on states' >> own fiscal resources by these schemes. This not only limits states' fiscal >> space but also places poorer states at a disadvantage since they have >> greater difficulty in coming up with matching contributions. Finally, CSS >> also require states to provide all human resources necessary to implement >> the schemes. Again, the less developed, poor states, already suffering from >> scarcity of human resources, suffer more on this account. >> >> CSS also suffer from the same-medicine-for-all and one-size-fits-all >> syndromes. While Bihar and Uttar Pradesh may need electricity more >> urgently, Haryana may face greater water scarcity. Likewise, as Rajasthan >> chief minister Vasundhara Raje Scindia has forcefully argued, the >> assumption underlying CSS that projects cost the same across the vast >> territory of India often breaks down across regions even within the same >> state. Rural electrification costs a lot more per village when villages are >> spread out far away from the cities than when they are within close >> proximity. >> >> If the country continues to travel down its current path and brings such >> vast areas as health, housing, water and electricity under the ambit of >> centrally imposed and implemented rights, states will be left with little >> fiscal space of their own. On the one hand this expansion of CSS would kill >> the huge advantage of the federal structure that permits experimentation >> across a large number of states and also within states. On the other hand >> it would undermine allocation of fiscal resources based on local needs of >> states. >> >> As more and more fiscal resources are absorbed by central schemes, >> expenditures on such important non-Plan items as police and judiciary -- >> already meagre -- will be adversely impacted. Therefore, the future >> government will need to carefully revisit and reassess Centre-state fiscal >> relations with an especially critical eye on CSS. >> >> Two related issues of the reform of institutions may be noted. First, now >> that India is a market economy, the distinction between Plan and non-Plan >> expenditures is meaningless. Second, because the Finance Commission is >> disbanded soon after it submits its recommendations, implementation of >> those recommendations becomes the prerogative of the central government. >> But in case of disputes, this creates the awkward situation of the Centre >> becoming the arbiter while also being a party to the dispute. >> >> The solutions to these twin problems is to disband the Planning >> Commission and let each Finance Commission stand until its successor >> commission is functional. Each Finance Commission can then oversee >> implementation of its recommendations. >> >> *The writer is professor of Indian political economy, Columbia >> University.* >> >> >> >> >> >> >> >> -- >> >> *Saurav Datta* >> >> >> >> *Mobile: +91-9930966518* >> >> *Twitter : SauravDatta29* >> >> *"To those who believe in resistance , who live between hope and >> impatience and have learned the perils of being unreasonable.* >> >> *To those who understand enough to be afraid, and yet retain their fury"* >> >> >> >> -- >> You received this message because you are subscribed to the Google Groups >> "Free Binayak Sen" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to [email protected]. >> To post to this group, send email to [email protected]. >> Visit this group at http://groups.google.com/group/free-binayaksen. >> For more options, visit https://groups.google.com/d/optout. >> > > -- > You received this message because you are subscribed to the Google Groups > "Free Binayak Sen" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > To post to this group, send email to [email protected]. > Visit this group at http://groups.google.com/group/free-binayaksen. > For more options, visit https://groups.google.com/d/optout. > -- Peace Is Doable -- You received this message because you are subscribed to the Google Groups "Green Youth Movement" group. 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