Impact of Changes in Fiscal Federalism and Fourteenth Finance Commission Recommendations Scenarios on States Autonomy and Social Sector Priorities

This paper compares the additional gains from higher tax devolution in the post 14th FC period, with the additional burden due to the withdrawal of certain central schemes and the changes in the sharing pattern of major Centrally Sponsored Schemes calling for greater contribution from the states. Average burden of the general category states due to CSS is 0.69 percent of combined GSDP of these states, whereas gains in tax devolution is 0.71 percent of combined GSDP of these states for the year 2015-16. In the following year, the difference is even less. This paper questions the rhetoric of greater autonomy for the states, which claims that the states have got additional money in the form of tax devolution and are therefore free to decide the priorities. The paper also discusses declining priority for social sector and child budgeting in the post 14th FC years, 2015-16 and 2016-17.