New Delhi: The union government kept the 16th Finance Commission's terms of reference brief and direct, and allowed the Constitutional body complete power to decide on devolution of money based on state suggestions, finance secretary TV Somanathan said on Thursday. Somanathan went on to say that the administration had extensive consultations with the states and was open to their ideas.
In response to a question about why state expenditure reforms to improve financial health were not mentioned in the terms of reference, Somanathan explained that some states had urged the union government not to include any additional terms that they feared would impinge on their fiscal autonomy.
"I am confident that the commission will consider all relevant factors and reach an appropriate conclusion." "The central government is very sensitive to cooperative federalism and takes the views of the states very seriously," said Somanathan.
He also stated that the terms of reference announced on Thursday were definite, albeit shorter than those of previous Finance Commissions. One could argue that less is more, and that the parameters really provide the commission greater discretion to receive feedback and recommend an award within the Constitutional framework, as indicated by the finance secretary.
In response to another query, he stated that the commission's head and members would be appointed soon. He noted that, as far as he knew, there was no legal prohibition on someone serving on two different commissions.
In response to a query about the government's fiscal deficit, he stated that nothing has changed his belief that the government will complete the year with a budget deficit of around 5.9% of GDP. "We will adhere to fiscal targets," Somanathan said, adding that the recent extension of the free food-grain scheme will not deviate the government from its planned course.
