Fourteenth Finance Commission

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Wicked problems; financing environmental services

Posted on:31-08-15

‘Just letting you know, Raghu’, said my friend, a passionate advocate of participative urban planning. ‘Whatever you do, don’t try to solve the stray dog problem’.

 ‘Where does that come from?’ I asked. I was not expecting that. We were discussing strategies of how to get people interested in coming together to solve their civic problems. Read more »

Rural Local Body Core Functions and Finances

In 2013-14, Accountability Initiative(AI) was tasked by the Fourteenth Central 14th Finance Commission (FFC) to examine several aspects of the structure of devolution of powers, responsibilities and finances by states to rural local bodies (RLBs), based on the data provided by them to the FFC. Read more »

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The game of diversion of Finance Commission funds

Posted on:24-04-15

The results of the Twelfth Finance Commission’s directive that funds meant for the Local Governments should reach them within 15 days of their release, and that the Comptroller and Auditor General should verify compliance, did have a salutary effect. States, including those that had acquired a bad reputation for such diversions, did assiduously adhere to these stipulations. The major disincentive for them to delay funds was the additional directive that the States ought to pay interest to the local governments, for the delays caused due to transfers later than 15 days, from the State to the Local Government.

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Why the Fourteenth Finance Commission did what it did.

Posted on:10-04-15

It was not always that Central Finance Commissions gave pointed directions on how and what for, the funds recommended to be granted to the local governments were to be spent. Initial reports of Finance Commissions immediately following the Constitutional amendment that expanded their scope to recommending grants to local governments, were more sanguine about the manner in which funds were to be transferred to them.

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How Will—Unprepared—States Handle A $29-Billion Budget Bonanza?

Publication Name: 
IndiaSpend
Publication Author: 
Yamini Aiyar, Avani Kapur & Vikram Srinivas
News Date: 
04/02/2015

Pushing the Envelope; the Fourteenth Finance Commission’s Conditions on Local Government Grants

Posted on:04-04-15

I concluded last week’s blog with the observation that the FFC has the leeway to suggest ‘measures’ to ‘augment’ the Consolidated funds of States, to ‘supplement’ the finances of Local Governments. On a plain reading, these words seem to convey two critical aspects of the Finance Commission arrangement:

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Increased local government grants – the good and the bad news

Posted on:30-03-15

At first sight, it seems that there is nothing but good news for the local governments from the report of the Fourteenth Finance Commission (FFC). The report has been accepted by the Union government and will be implemented from 2015 to 2020. 

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The Fourteenth Finance Commission and its implications on the Local Governments

Posted on:24-03-15

There is no doubt that the recent report of the Fourteenth Finance Commission represents a watershed in the evolution of centre-state-local fiscal relations in India. Two of its landmark recommendations that pertain to the Centre-State design have been already accepted by the Central Government; the first is the sizeable increase in the State share of central revenues from 32 percent to 42 percent, and the second is the forgoing of special category status that has been conferred to some States. Both these recommendations are bound to have their political fallouts too, and were not free from controversy. A dissent by one of the members of the Commission showed that the decision to go in for such dramatic changes was not unanimous. Read more »