Federalism and India’s human capital (GS-2 Polity The Hindu Editorial)

25 Feb Federalism and India’s human capital (GS-2 Polity The Hindu Editorial)

Federalism and India’s human capital                                          (GS-2 Polity, The hindu Editorial)

Investing in human capital through interventions in nutrition, health, and education is critical for sustainable growth. Human Capital Index, the country ranked 116th. The National Family Health Survey-5 for 2019-20 shows that malnutrition indicators stagnated or declined in most States. 

Several government initiatives

• The National Health Policy of 2017 highlighted the need for interventions to address malnutrition. 
• NITI Aayog’s National Nutrition Strategy, the Poshan Abhiyaan was launched, as part of the Umbrella Integrated Child Development Scheme. 
• Mission Poshan 2.0’ 
• the Samagra Shiksha Abhiyan has been the Centre’s flagship education scheme since 2018. 
• India spends just 4% of its GDP as public expenditure on human capital (around 1% and 3% on health and education respectively) — one of the lowest .
• why these interventions are not leading to better outcomes
  • Because decentralisation and devolution is not followed in true spirit.
• gradual shift in the distribution of expenditures and revenue towards sub-national governments, it has positive effects on the human capital.
• How
  • Fourteenth Finance Commission increased the States’ share in tax devolution from 32% to 42%, which was effectively retained by the Fifteenth Finance Commission.
  • three tiers of government are envisaged, with the Constitution 
  • Division of subjects in the three lists under the Seventh Schedule..
  • The Constitution gives the bulk of expenditure responsibilities to States, the Centre has major revenue sources. 
  • Centre can make ‘grants for any public purpose’ under Article 282 
  • Fiscal transfers are an unconditional part of tax devolution, transfers under grants-in-aid or Centrally Sponsored Schemes (CSSs) can be conditional. 
• Several imbalances
  • The 73rd and 74th Amendments: decentralisation by constitutionally recognising panchayats and municipalities 
    • listing their functions in the Eleventh and Twelfth schedules, respectively. These include education, health and sanitation, and social welfare for panchayats, and public health and socio-economic development planning for municipalitie

 shifts towards greater State autonomy.

• issues in the design of CSSs as well:- CSSs typically have a cost-sharing model
• A functionally and fiscally empowered third tier would not only be more in keeping with the constitutional spirit. 

Towards a solution

• Centre needs to rethink the nature of its actions.
• It should play an enabling role, for instance, encouraging knowledge-sharing between States.
• States need adequate fiscal resources.
• States should rationalise their priorities
• The Centre should refrain from offsetting tax devolution by altering cost-sharing ratios of CSSs and increasing cesses. 
• The unconditional nature of these vertical transfers should be effectuated in spirit. 
• the heavy reliance on CSSs should be reduced
• Tax devolution and grants-in-aid should be the primary sources of vertical fiscal devolution.
• Panchayats and municipalities need to be vested with the functions listed in the constitution.

Download Link :The Hindu Zone Current Affairs 25 February

Swarn Singh

Plutus IAS Current Affair Team Member