Inclusive Governance, Fiscal Management and Social Accountability

The quality of governance in a State is determined by how effective the prevailing mechanisms of accountability of the government both towards people’s representatives (in the State Legislature) as well as towards people themselves. Transparency in government process and space for participation of people in the process of setting up budgetary priorities and contours of public policies are equally important. However, even a reasonably transparent, participatory and accountable system of governance might not adopt an approach towards ‘fiscal policy’ which is responsive to the needs and rights of the underprivileged sections. Hence, it is necessary that we examine the fiscal policy framework of public spending for social sectors in the State, and also the responsiveness of the State budget to the marginalized to arrive at a comprehensive understanding of how the state factors this complex and multi-dimensional phenomenon of governance.

Following the recommendations of the 14th Finance Commission in 2015, the States have got increased autonomy (in terms of the untied resources available to them). This has been accompanied by reduction in Union Government’s financial assistance to the States and in several of the social sector programmes. The States are expected to provide additional budgetary resources from their untied funds to compensate the reduced budget outlays. Also, the fund sharing pattern in Centrally Sponsored Schemes (CSS) between the Union Government and the States is set at 60:40 for most of the prominent social sector schemes. All these changes call for prudent expenditure management and using the increased fiscal autonomy by the States to prioritize critical social sectors.

The revenue mobilized by a government plays an important role in determining its fiscal space. The fiscal policy space available to the government of Odisha is crucial in deciding its public investment strategies and the priority to social sectors in the state’s overall budgetary spending. After the passage of the Goods and Services Tax (GST) Constitutional Amendment Bill by Parliament, the federalism of the country will have a new trend, and the States’ autonomy to decide taxes according to their socio-economic situations will be surrendered. As this will have an implication on the overall resource envelope of the State, it is urgent to discuss the subject of how to make adequate public resources available to the State government for giving priority to development sectors.

Given the scenario, the session on ‘Governance and Fiscal Management Session’ in the Odisha Development Conclave-2016 would focus on some of the above mentioned key issues to improve the quality of governance in Odisha.

Focus Areas:

  • Fiscal and Financial Management
  • Governance Accountability
  • New Resource Opportunities