Vol. 3 No. 3 (May-Jun) (2022): Indian Public Policy Review

India has a long and checkered history of planning with some success but many failures. Despite India’s federal structure India’s approach to planning has been top-down with the union government controlling many levers – financial and otherwise to determine the direction of the economy and social programs. India has tried 3 types of planning – “directed planning”, “indicative planning” and now just a “strategy but no planning”.  India needed to replace the Planning Commission but not give up on planning altogether. Just as the rest of the world was going back to a “new planning” surge to handle climate change and the desire to meet the SDGs, India abolished planning altogether. The successor to the planning commission - the Niti Aayog needs to get back to “new planning”, that is now being adopted by many countries with stronger leadership. A legitimised authorising environment and effective use to plan can help India achieve the SDGs by 2030 and become a prosperous country by 2047.

This study addresses an important policy issue of designing equalisation transfers from the union government of India to the states. It empirically measures the own revenue efficiency and potential of General Category and Special Category States using the frontier approach for panel data.  It also analyses the effect of transfers on states’ own revenue and its components. Results indicate a strong crowding-out effect of transfers in General Category States and a strong crowding-in effect in Special Category States. Amounts of additional transfers required to provide equal level of public services for all 29 States in four alternative scenarios range between ₹1072 billion and ₹15,948 billion. The range is based on alternate benchmarks of fiscal capacities and expenditure needs. We hope that these results will be useful to policymakers and other stakeholders to design appropriate fiscal transfer strategies such that all citizens can avail a standard level of public services in India.

A large number of Central Banks around the world are planning to introduce Central Bank Digital Currencies (CBDCs) as a legal tender in their countries. The Reserve Bank of India (RBI) has also revealed similar plans, with an Indian CBDC expected in the near future. Any evaluation of such a major change in the nature of money requires a broader understanding of the opportunities and challenges arising from the adoption of CBDCs. In this paper, we discuss these issues at the conceptual level and specifically in the Indian context. We show that the conceptual issues can be characterised in three ways – monetary sovereignty issues, issues from the point of view of national sovereignty, and developmental issues. In the Indian context, we analyse these issues from the perspective of the rapid digitalization taking place in the country. Finally, we discuss the steps that the RBI needs to take in order to introduce an Indian CBDC.

While the health grants to local governments recommended by Fifteenth Union Finance Commission in the wake of Covid 19 pandemic lays emphasis on the trust-based approach to local governments and decentralization of health, the danger of Mission Creep can undo the potential and effectiveness of the grants to strengthen the primary health care sector. Lack of sensitization towards local governments; the misconception that local governments and its stakeholders are illiterate, weak and corrupt entities;  absence of an institutional monitoring mechanism to conduct a follow-up of the recommendations made by the respective Finance Commissions; lack of co-ordination between various Ministries of union and state governments; and the erosion of cooperative federalism can all contribute to health grants falling prey to the vicious cycle of Mission Creep Syndrome.

A review article based on ‘The Weirdest people in the world’ by Joseph Henrich