Coronavirus | Why States don’t have enough money for the COVID-19 battle (and what the Centre can do)

A running theme during this lockdown period and of the handling of the COVID-19 pandemic in general so far is that decision-making has been largely centralised while the fact is that it is the States that bear responsibility for the real frontline battles against the pandemic.

So we’ll look at the sharing of funds between Centre and State governments and take both a long-term and short-term view. What was the balance like between State and Centre before the pandemic hit? At different phases in our history there are ebbs and flow toward greater decentralisation or greater Central control. At which juncture in that curve do we happen to be in now? More immediately, States are desperately short of funds, especially now with economic activity being almost absent for the past month-and-a-half. How can this problem be addressed?

The key strategy is fiscal empowerment of States

Our guest today is M. Govinda Roa, an economist who was a former member of the 14th Finance Commission. He is a regular columnist for The Hindu on these issues.

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