Finance Commission begins Karnataka visit with interaction with economists

Issues related to incentivising States on various performance indicators was discussed - Experts gave their extensive suggestions on the design of such incentives and potential indicators.

The 15th Finance Commission headed by Chairman, Shri N.K. Singh along with its Members and senior officials began its Karnataka visit with interaction with economists.

A number of issues relating to the Terms of Reference of the Finance commission were discussed which include:

Issues related to incentivising States on various performance indicators was discussed - Experts gave their extensive suggestions on the design of such incentives and potential indicators.

Experts while commending Karnataka's good fiscal performance, highlighted the large regional inequality which exists within the State. Similar regional inequalities in other major states in India were also discussed along with some possible solutions.

In the area of democratic decentralization, in which Karnataka is a pioneer, various recent studies and trends related to the third tier of government were discussed. Experts raised concerns regarding large infrastructure gaps and democratic deficit which persists. With regards to urban local bodies, special attention was drawn towards increasing financial need due to rapid urbanization, suggestion related to better revenue collection and some measures to improve land management was given to the Commission.

Experts also raised the issue of the use of population data of census 2011 by the Commission. Most of the Experts were of the opinion that the latest population data must be used as that represents the present needs of the States. However, incentives should be designed for States which have done better population control.

Suggestions on the issue of intergovernmental transfers through Centrally Sponsored Schemes, revenue deficit grants and other specific purpose grants were also discussed

The economists who were present at the interaction with Chairman Shri N. K. Singh and members of the Finance Commission include - Mr.T R Raghunandan Formerly Joint Secretary, Ministry of Panchayati Raj; Dr. Jyotsna Jha, Director, Centre for Budget and Public Policy; Dr. Rupa Chanda Professor, IIM, Bangalore; Dr. Narender Pani Professor, NIAS; Mr.Venkat Rao Ghorpade; Mr.H.A.C Prasad, Secretary General, FKCCI; Dr. Ashwin Mahesh CEO of Mapunity; Mr. Pranay Kotasthane, Head Research, Takshashila Institution, Bangalore; Mr. M Govinda Rao, Emeritus Professor, NIPFP& Councillor, Takshashila Institution, Bangalore; Dr. S.S. Meenakshisundaram Visiting Professor, National Institute of Advanced Studies, Bengaluru; Dr. Kala Sridhar, Professor, Institute for Social and Economic Change, Bengaluru; Dr. D. Rajashekher Professor, Institute for Social and Economic Change, Bengaluru; Prof. R S Deshpande, Former Director, Institute for Social and Economic Change, Bangalore; Mr. M G Chandrakanth, Director, ISEC and Dr. S R Keshava, Professor, Department of Economics, Bangalore University.

(With Inputs from PIB)