FinCom should use contemporary population data, say economists

Economists today suggested to the Finance Commission to use contemporary population data and reward states for population stabilisation policy.

These views were expressed by economists during their interaction with the 15th Finance Commission here.

Arvind Subramanian (Chief Economic Adviser), Pronab Sen (Country Director, International Growth Center), Pami Dua (Professor, Delhi School of Economics), N R Bhanumurthy (Professor, NIPFP), Arvind Virmani (President FSI), Sanjeev Gupta (Deputy Director, Fiscal Affairs Department, IMF), Surjit S Bhalla (Part time Member of PMEAC), and Shankar Acharya (Honorary Professor, ICRIER) were among the economists who participated in the interaction.

They were also of the view that permissible limits on borrowings under fiscal consolidation roadmap needed to be equally applicable to centre and states in the context of overall macroeconomic framework, said a release of the Commission.

Economists, it said, agreed that it would be "realistic to use contemporary population data but weightage should be assigned to population and also rewards for population stabilization policy".

The rewards should be appropriately determined by the Commission, they said, adding the Commission needs to balance equity with efficiency.

The other issues that figured during the interaction, include abolition of Planning Commission, GST implementation, and matters related centrally sponsored schemes.

Commission's Chairman N K Singh said that continued engagement with domain experts over the coming months will help commission in firming up the approach before reaching tentative conclusions both on the vertical and horizontal devolution of revenue.

Besides an approach for local bodies and panchayats which were both realistic and would genuinely deliver the intended resources to the beneficiaries, he said.

Later, the Commission also held the first meeting with the Advisory Council to get inputs on various issues under the purview of the Commission.

These included political economy behind the Centrally Sponsored Schemes, their future and methods required for long term financing.