Reserve Bank of India (RBI) Governor Shaktikanta Das (pictured) on Friday said there is a “great need” to institutionalise state finance commissions and helping the local bodies enhance their revenue generation capacities.
He said fiscally strong states and Centre is the “essence” of Indian federalism and weakness at either end poses a slew of challenges for the country. “There is a great need to strongly institutionalise the state finance commissions and empower the third tier of governance by enhancing their revenue-generating capacity.” He was speaking at the central bank headquarters before the 17th L K Jha Memorial Lecture, which was given by 15th Finance Commission chairman N K Singh. Das said local bodies deserve more attention and is an aspect that needs to be looked into.
The governor also said that GST introduction and formation of the Niti Aayog give a greater role to the states in our federal set up. “The essence of Indian federalism is that both the union and the states have to be fiscally strong. A weak union is both detrimental to both national sovereignty and growth.”
Das said his colleagues still discuss the balance of payment crisis of the early 1990s, and underlined the need to document the journey of reforms by people like Singh, because people need to know about it. PTI