02 March, 2021

Mind Your Own Wallet

The case for fiscal autonomy is strong. But are the states demanding it responsible enough?

Mind Your Own Wallet

Farooq Abdullah’s demand for autonomy for Kashmir has opened a Pandora’s box alright. Except that the consensus among experts is that three of the four states-J&K, Assam, Punjab and Tamil Nadu-which have demanded autonomy won’t know what to do with it if they get it.

Indeed, in liberalised India, autonomy, especially fiscal autonomy, is an idea whose time has come. States today are competing for foreign projects, multilateral aid, infrastructure investments and sprucing up their record-books to present a better face to the interested. And fiscal autonomy could greatly help. Trouble is, fiscal autonomy goes hand in hand with fiscal responsibility, which is absent from the balance-sheets of the first three states.

J&K and Assam, for instance, are among the 10 special category states in India which account for 5 per cent of the population, yet hog 30 per cent of Central assistance. In ‘99-2000, J&K got Rs 2,632 crore, Rs 250 crore more than a much bigger and worthier state like Bihar; Assam got Rs 1,616 crore, the same as...

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