fiscal consolidation Current Affairs - 2019
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Reserve Bank of India (RBI) governor Shaktikanta Das called for permanent status to Finance Commission. RBI Governor Shaktikanta Das is also the member of the fifteenth finance commission.
Necessity of the Permanent Status
- The permanent status will ensure consistencies between finance commissions so that there is some certainty in the flow of funds to states.
- The permanent status will also provide for continuity between the successive finance commissions.
- The permanent status will also provide for the finance commission to function as a leaner entity in the intervening period until the next finance commission is set up in a full-fledged manner.
- The establishment of the finance commission through permanent status will also enable it to address issues arising from the implementation of the recommendations of the finance commission during the intervening period.
The RBI governor also called on for a robust expenditure planning without compromising on fiscal consolidation as fiscal federalism gathers momentum in the era of uniform goods and services tax (GST). He said that it is equally important to undertake robust expenditure planning based on a ‘commonly agreed expenditure code’ to address the socio-economic challenges without diluting the goals of fiscal consolidation.