This is indeed a serious issue affecting centre state relationship. Of course, we should expect SC to enlighten us with its own pearls of wisdom, though any wise counsel should be against it. Anyway, the main point is this- we must decide how much percentage of income from taxes and levies etc. should be utilised for cost of administration like salaries, pension etc. and follow the limits strictly. It should not be the case that taxes are used up almost entirely for salaries and pensions and such basic operating expenses!!! Finance Commission should be asked to develop such norms for the states and the centre. This should be in addition to the Fiscal Responsibility Act which covers extent of permissible borrowings. There is no politics here; just pure routine management of fiscal affairs.
This is indeed a serious issue affecting centre state relationship. Of course, we should expect SC to enlighten us with its own pearls of wisdom, though any wise counsel should be against it. Anyway, the main point is this- we must decide how much percentage of income from taxes and levies etc. should be utilised for cost of administration like salaries, pension etc. and follow the limits strictly. It should not be the case that taxes are used up almost entirely for salaries and pensions and such basic operating expenses!!! Finance Commission should be asked to develop such norms for the states and the centre. This should be in addition to the Fiscal Responsibility Act which covers extent of permissible borrowings. There is no politics here; just pure routine management of fiscal affairs.
Hi Anil, a wonderful article as always. Displays your journalistic prowess to an exponent. Warrants repeated readings!