Mathur Ritika Passi

THE ASYMMETRY IN FISCAL
POWERS ENSURES BASIC SYMMETRY
IN DEVELOPMENTAL POLICIES,
INCUBATED PRIMARILY BY THE
UNION GOVERNMENT.
a significant consideration for India. ODA
accounts for just 0.15% of total receipts in
the current fiscal 2015-16.
India’s sustainable development priorities
are succinctly embedded in the five-year
plans of the Union government. The
Twelfth Five Year Plan (2012-2017) is
still being implemented. A new national
policy formulation and implementation
architecture is being evolved by the
government of Prime Minister Narendra
Modi. It is expected it shall lean towards
enhanced federalism and the devolution
of resources to provincial and local
governments. Participative and inclusive
democracy are key themes along with social
justice and shared prosperity. These broad
themes resonate well with the agenda of the
SDGs. 3
How well prepared is India to implement
the SDGs from 2016 onward? I argue
that India has a sophisticated institutional
framework, which recognises the imperative
to adopt complex goals and to coordinate
state effort—both vertically across levels
of government and horizontally across
agencies within a level of government—
with the active participation of non-state
actors, in a collective effort to achieve these
goals.
The proof of the pudding lies in the fact
that the all the eight goals and 12 targets
of the MDGs were incorporated into the
planning and budgetary process, and the
35 indicators were monitored and reported.
Consequently, it would not be difficult to
also incorporate the SDGs into the existing
development strategy framework going
ahead. The extent to which these targets
can be monitored and the quality of the
metrics—how well the chosen proxies will
reflect achievements on the ground—will
depend significantly on the indicators,
which are yet to be chosen.
Enabling Institutional Features
Until the late 1970s the ability of the Union
(federal) government to drive a national
development agenda was virtually assured.
A constitutional bias towards centralisation
was reinforced by the legacy of the
independence movement, which united
the polity. Adoption of a central planning
process on the template of Soviet Russia,
reservation of the “commanding heights
of the economy” for the public sector 4
and large-scale nationalisation of private
business and industry in the 1960s and 70s
all served to significantly bias the skew of
fiscal power towards the Centre, far beyond
what was intended in the constitution.
Some of these centralising drivers have
been tempered by subsequent changes in
the international economic architecture,
most specifically—the bias against the
private sector is fiscally unsustainable
today; political plurality defines the
Indian party system; since 1992 a third
level of government at the local level has
been constitutionally mandated via an
amendment, although implementation
of the provision has been left to state
governments; since 2014 the Finance
Commission now specifically devolves
shares in Central revenues to local
governments; and economic liberalisation
has released our “animal spirits” and
enhanced growth.
Happily, despite the muscularity of
federalism and political pluralism over
the last three decades, policy perspectives
have converged rather than diverged across
parties; policy coherence is the leitmotif,
despite regular changes in governments;
and the imperative of practicality trumps
ideology. The section below reviews the
institutional drivers and trends.
The Indian Constitution
The Indian constitution, adopted in 1949
and effective from 1950, makes India a
Union of States. But it is not strictly a
federal polity. Unlike in the United States,
each of the twenty eight provinces (called
state governments in India) do not have
separate constitutions, nor can they secede
from the Union, principally because the
Indian polity was not created by individual
provinces agreeing to form a federation.
This is why India is classified as a unitary
state with federal characteristics, or a
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