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Resource centre on India's rural distress
 
 

Forget Union budget, track state budgets now -Richard Mahapatra

-Down to Earth

States, already flush with cash surplus of Rs 1.6 lakh crore, will get significantly raised share from the central taxes. Along with this financial devolution, the Central government is also going to devolve the responsibility of planning and implementation of centrally sponsored schemes to states in the coming budget. This makes state budgets the key instruments of gauging the social sector

Just four days before the Union budget, the government accepted the recommendations of the 14th Finance Commission. The Commission's key recommendation is to increase the states' share in central taxes from 32 to 42 per cent. It is a windfall that has great ramifications for the social sector. The Commission's financial allocation will leave the Central government with less money. This implies the Central government will encourage states to spend more on social sector and also devolve implementation of the Centrally-sponsored schemes that currently form bulk of the social sector spending.

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