While many taxes are best collected at the Centre, the principle of subsidiarity also says expenditure is best made close to the point of delivery where accountability to the user of public services can be higher. [...] The 15th FC award, for example, steadily reduces the share of revenue deficit grants and increases the share of grants to local bodies (total share 43.6%) partly to compensate for the absence of delegation by states. [...] Since conditionality is only feasible through grants they have to continue to form a large share in the devolution of resources from the Centre to the states. [...] 10 The automatic gap-filling approach that used to be followed under the perspective that it is the duty of the Centre to ensure requirements of citizens are met created poor incentives for states. [...] Unbundling of production and distribution in the 1990s and the Electricity Act (EA) of 2003 succeeded in improving production and transmission.
- Pages
- 21
- Published in
- India
