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Prime Minister Narendra Modi, who often talked of cooperative federalism ever since his Lok Sabha election campaign last year, signalled a new turn in the Centre-state relationship after the14th Finance Commission awarded a liberal revenue transfer to states.
Not only states, municipalities and local self governments at the village level have also been given equal importance as far as revenue outgo is concerned. Modi, who use to make annual pilgrimage to New Delhi for seeking Central funds, has always advocated that the states should be given more independence in making policies for their development and a free hand in spending.
On January 1, by abolishing the Planning Commission and setting up NITI Aayog in its place, he ensured that the states get ample freedom in policy making. The Finance Commission awards were the second test of cooperative federalism. A senior government official told Deccan Herald that most of the recommendations of the Finance Commission will get reflected in the Budget to be presented by Finance Minister Arun Jaitley on Saturday.
Though the prime minister confessed that the huge outgo to the states were going to put tremendous pressure on the Central finances, he said he was satisfied with the fact that the funds would be used for states’ development.
“Resources are going to states to ensure that poverty is eliminated, jobs are created, houses, drinking water, roads, schools, hospitals and electricity are provided. This has never happened in this country before,” the prime minister said after the Finance Commission award. The commission has made it clear that enhanced resources would not mean any curtailment in funds to states under the heads of for poverty alleviation, NREGA, education and others.
The Centre, however, has signalled that the Centrally Sponsored Schemes (CSS) will be majorly cut down so that the states make their own schemes and implement them, a demand that the states have been making for a long time.