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30/08/2022 - Economy

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August 30, 2022

Analyse the major issues influencing the framework of fiscal federalism in the country.  (200 Words)

Refer - The Hindu

Enrich the answer from other sources, if the question demands.

5 comments
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IAS Parliament 2 years

KEY POINTS

·        As both the Union government and States are expected to work closely in a co-operative federal structure, frictions arising out of these exchanges might have repercussions on both resource sharing and expenditure prioritisation.

·        A set of issues related to Goods and Services Tax (GST) such as the rate structure, inclusion and exclusion of commodities, revenue sharing from GST and associated compensation.

·        Second, State-level expenditure patterns especially related to the welfare schemes of States.

·        A key issue of recent debates between the States and the Centre is the quantity and quality of public expenditure by the States.

·        While States demand more fiscal space for increasing discretionary spending, the Centre is pushing for more fiscal discipline by reducing the scope for discretionary spending and limiting States to focus on mandatory expenditures.

·        In a federal system, States’ fiscal stress gets spilled over to the Centre, leading to a situation of overall magnified fiscal slippages.

·        Fiscal expansion financed through debt and the resultant debt accumulation have important impacts on the economy both in the short run as well as in the long run.

·        The Centre, too, on its part needs to demonstrate commitment to fiscal discipline by sticking to announced fiscal glide path to ensure the sustainability of a frictionless co-operative federal structure.

Sangeetha S 2 years

Kindly review

IAS Parliament 2 years

Try to include about issue of freebies, include about article 282. Keep Writing.

Ramithaa 2 years

Kindly review 

IAS Parliament 2 years

Try to include about discretionary expenditure, article 282, some specific scheme with fund allocation and bring coherence in the answer. Keep Writing.

PANDI SANTHOSH RAJA S 2 years

Kindly review

IAS Parliament 2 years

Good attempt. Try to include about discretionary expenditure along with article 282. Keep Writing.

Varon 2 years

Kindly review 

IAS Parliament 2 years

Try to include about discretionary expenditure, freebies, article 282 and bring coherence in the answer. Keep Wrtiing.

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