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IN072410_Have_the_State_M_A_Oommen

IN072410_Have_the_State_M_A_Oommen - I NSIGHT Have the...

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INSIGHT Economic & Political Weekly EPW july 24, 2010 vol xlv no 30 39 This is a summary of a public lecture delivered on behalf of the Gulati Institute of Finance and Taxation in T hiruvananthapuram on 28 January 2010 and modified following the recommendations of the Thirteenth Union Finance Commission. M A Oommen ( [email protected]) is currently the chairman of the Fourth State Finance Commission, Kerala. Have the State Finance Commissions Fulfi lled Their Constitutional Mandates? M A Oommen The State Finance Commission, although a technical and quasi- judicial constitutional entity like the Union Finance Commission, has to help local governments plan for economic development and deliver social justice and public services at the local level. This article evaluates the history of the performance of SFC s in general and shows that they have missed a great opportunity to contribute to the process of building a more inclusive, participatory and environment- friendly fiscal federalism via promoting decentralised governance in the country. It argues that the blame is to be collectively shared and shouldered by the union, state and local governments. We will strive increasingly to quicken the public sense of civic duty, that thus... we will transmit this city not only not less, but greater, better and more beautiful than it was transmitted to us (emphasis added). –(Oath of office required of council members in the ancient city of Athens) I wish to approach the topic from the broad context of decentralisation and local governance in the Indian federal polity. Of late, there is a swing towards fi scal federalism that promotes demo- cratic decentralisation, which ideally as Wallace Oates pointed out long ago, should allow for an optimum equilibrium to be reached through effective citizen’s engagement in expressing their prefer- ences and local government’s efficiency in meeting public demands (Oates 1977). From a minuscule number of 4,841 Lok Sabha, Rajya Sabha and state assembly members representing the country, following the 73rd/74th Constitutional Amendments ( CA s), India has today 2.5 lakh local governments, comprising over three million elected representatives which make the Indian federation the largest democratic country with the big- gest representative base in the world. The legitimacy of this great democratic transformation is to be derived by mak- ing rural and urban India “not only not less, but greater, better and more beauti- ful than it was” before. Federal countries are broadly classi- fied into dual federalism or cooperative federalism. Before the 73rd/74th CA s, India was a dual federalism comprising the union and the states. The 73rd Con- stitutional Amendment designs a six- layered federal polity starting from gram sabha, through the gram panchayat, block and district panchayats to the state and the union which is the apex tier. The 74th Amendment incorporates the urban local bodies ( ULB s) into this federal structure. India is, thus, a multi-level fed- eralism which can be broadly categorised as a functional c ooperative federalism.
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