Chairperson of the 14 Finance Commission Y.V. Reddy felt that devolution of more tax revenue to the States need not necessarily mean decreased spending on the social sector. On the contrary, the States’ share has constituted over 80 per cent of the combined expenditure on social sector by the Union and the State governments for the last 25 years.
Delivering a talk on the topic ‘14 Finance Commission and its implications for the State finances with special focus on social sector expenditure,’ hosted by Centre for Economic and Social Studies here on Tuesday, Mr.Reddy said despite the recent phenomenon of spending through the Centrally-sponsored schemes in social sector, the States’ share has remained significantly high.
As per the Indian Public Finance Statistics, the States’ contribution to the combined social sector spending in 1990-91 amounted to 84 per cent, while in the year 2013-14, the same stood at 80 per cent.
Providing sector-wise statistics for 2014-15, Mr.Reddy underlined the fact that share of the States in combined social sector spending remained even higher at 90.32 per cent. When calculated against the net of Central transfers, the States’ spending still constituted 70.78 per cent of the total.
