Former Governor of Reserve Bank of India (RBI) C. Rangarajan has underscored the importance of fiscal federalism at various levels in current Indian democracy.
Fiscal federalism was the economic counterpart of political federalism, Dr. Rangarajan said while releasing a book 'Essays on fiscal decentralisation to local governments in India' by noted economist M.A. Oommen here on Thursday. The event was organised jointly by the Gulati Institute of Finance and Taxation (GIFT) and the Kerala Institute of Local Administration (KILA).
Decades after the 73rd and 74th amendments, it remained a fact that expenditure by local governments was small compared to that of the State or Central governments. Distribution of resources was also essential alongside decentralisation of powers for achieving economic growth, Dr. Rangarajan said.
He underscored the need to exploit the distinct role and capabilities of panchayati raj institutions. The institutions are close to the people and therefore they have a greater ability to understand the problems. That said, much depended on the power and responsibilities which State governments were willing to share with the local governments, he said.
Inaugurating the event, Finance Minister K.N. Balagopal said Mr. Oommen's book, which provided deep insights on decentralisation, would be of great help to the younger generation, especially when the State was celebrating the 25th anniversary of the People's Plan Campaign.
Former Finance Minister T.M. Thomas Isaac said that democratic decentralisation had a profound impact on the socio-economic landscape of Kerala. The achievements had been remarkable and the experience proved that the State chose the right path, Dr. Isaac said.
The book release event was held to celebrate the 90th birthday of Mr. Oommen. State Planning Board Vice Chariman V.K. Ramachandran received the first copy of the book.
Mr. Oommen spoke on his more than 50 years of career as an economist and academician. Sally Wallace, Professor of Economics, Georgia State University; D.K. Srivastava, former member, 12th Finance Commission; N. . Varghese, Vice Chancellor, National Institute of Educational Planning and Administration (NIEPA); K.N. Harilal, Centre for Development Studies; Joy Elamon, KILA director; and K.J. Joseph, GIFT director, spoke.
