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More financial flexibility to States to utilize the untied resources

By increasing the Tax Devolution from 32% to 42%, States have been given more financial flexibility to utilize the untied resources. This recommendation has come in support of the laudable objective of cooperative federalism emphasizing the need and role of strong States in our federal polity. This information was given by the Minister of State (Independent Charge) for Planning, Shri Rao Inderjit Singh in a written reply in Rajya Sabha.

The Minister said that there is no doubt that the States have to assume a much larger and more important role in nation’s development. From time and again, States have stressed on various occasions the necessity of giving more resources, greater freedom and a stronger voice to the States, as a one-size-fits-all approach does grave injustice to the diversity of our country.  Hence, being the elected Governments and sharing equal responsibility with the Central Government, it is believed that each State Governments will make best and efficient use of the untied funds available to them in different schemes including the schemes transferred to them.

Shri Rao said that in the Union Budget 2015-16, eight Centrally Sponsored Schemes (CSS) have been delinked from support from the Centre with a view that State may decide to continue (or not) with these schemes out of their increased resources resulting from the recommendations of the 14th Finance Commission. The list of these 8 schemes is given in Annexure-I.The list of schemes, in which sharing pattern will undergo change and jointly being implemented by States and Centre is placed at Annexure-II and the list of schemes to be fully supported by Union Government is placed at Annexure-III.