Public Administration Mains 2018 : Solved Paper Public Administration : Paper-2-Question-3
Public Administration Mains 2018 : Solved Paper Question Paper-2 (Question-3)
SECTION-A
Q3. a. Critically examine the criteria adopted by the 15th Finance Commission for allocation of resources to States. What have been the major issues of contention since the 10th Finance Commission? (State Government and Administration)
ANSWER: The Finance Commission determines the devolution of allocation of state funds between the Centre and states. The Finance Commission, set up in 1951 under Article 280 of the Constitution, basically decides how revenue has to be distributed between the Centre and the States. In addition, the Commission also decides the principles on which grants-in-aid will be given to the States. The 15th Finance Commission was constituted on November 27, 2017, in the notification issued on November 27, the ToR recommended, “the Commission shall use the population data of 2011 while making its recommendations.” The main bone of contention is the Centre’s latest proposal where the 15th Finance Commission, formed and tasked with deciding how taxes are to be shared/devolved between different states, has been told to use the 2011 Census data as its parameter. In the case of the 14th Finance Commission, that was 25%. Some of the other factors that the Commission takes into account are per capita income, area, and fiscal discipline. The 14th Finance Commission had raised the amount of untied transfers from the centre to states while also reducing some of the centre’s obligations to states. The result was a slight increase in aggregate transfers to states and greater autonomy to use them as they wished.