Devolution for Development

 

Devolution for Development

A major leap in transforming India to an advanced economy is to devolve more powers to local governments. The 16th Finance Commission can play a pivotal role in this regard. The sub-national spending in India has increased from 50% in 2013-14 to 60% after the 15th Finance Commission. This is higher than many of the advanced economies. But the government's attempt to shift resources from the center to state-level did not help the people in the states. Therefore, the government, for its part, has to now shift spending from state-level to local bodies to transform India into an advanced economy by 2047. In addition, the local governments must be allowed to generate their revenue, especially from property taxes. Property taxes are unavoidable, and cost-efficient and it taxes only the rich. Moreover, the elderly owners can be exempted under the Grandfathering clause. Hence, though the devolution cannot be done overnight, the 16th Finance Commission can lay a roadmap for it and can act as a key enabler for India to transform into an advanced economy by 2047.

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