Inclusive Governance, Fiscal Management and Social Accountability

The framework of Sustainable Development Goals (SDGs) acknowledges the criticality of improving governance. The SDGs recognize some aspects of governance (participatory democracy, for instance) both as core elements of well-being and enablers of development and, some of the other important parameters of governance (e.g. effective, accountable and inclusive institutions at all levels) as enablers of development. In the context of developing countries, it is also acknowledged widely now that public resources will play the most central role in financing development.

The issues pertaining to governance and fiscal policy, in the context of sustainable development, are very pertinent for India. Despite impressive economic growth rates over the last decade and a half, nearly 30 percent of India’s close to 1.3 billion population lives in extreme poverty. While India’s commitment to development is visible, its performance has been ranked a low 110th globally on the sustainable development index. Issues and challenges in the policy and governance landscape in India, however, are not uniform across States; State-specific contexts and priorities are important.

Odisha’s concerted efforts and encouraging performance in a number of sectors stand out among the economically weaker States. While the pace of economic growth in Odisha has been appreciable in recent years, it needs to address a number of complex challenges – like rising income inequality (for the Scheduled Tribes vis-à-vis other sections of the population), relatively high dropout rates in school education, and deficiencies in maternal and child health and nutrition outcomes, among others. Recognizing and addressing the gaps in Odisha’s governance, fiscal policy and public finance management system would contribute a lot towards taking the State to a much higher trajectory of inclusive, sustainable development.

In the domain of fiscal policy, recommendations of the Fourteenth Finance Commission have led to a compositional shift in Centre-State resource sharing in the country; State Governments now have greater autonomy in setting their public spending priorities as well as increased responsibility for financing of socio-economic development sectors. At the same time, the introduction of Goods and Services Tax (GST) has adversely affected the autonomy of States on the resource mobilization side. Also, the terms of reference for the Fifteenth Finance Commission, constituted last year, have been debated intensely because of the bias towards competitive federalism which is not quite compatible with the problem of regional disparity in India. It would be pertinent to examine these issues in the context of Odisha, taking into account the State’s context and specificities.

In recent years, the State Government has expanded the scope of public expenditure on rural infrastructure, poverty eradication and spending on sectors like education and health. Yet, Odisha needs to pay a lot of attention to effective implementation of pro‐poor policies and delivery of public services; it requires transformative progress towards putting in place accountable and inclusive institutions and policies at all levels. As regards strengthening governance accountability, what is needed the most is unrelenting commitment to social accountability so that people are at the centre of reforms in policy and governance.

In view of the issues indicated very briefly above, the session on ‘Inclusive Governance, Fiscal Management and Social Accountability’ in the Odisha Vikash Conclave – 2018 would discuss questions relating to:

  • Key reforms needed in the governance landscape in Odisha,
  • Moving towards accountable and inclusive institutions and policies at all levels, and Resource mobilization strategies and public spending priorities in the context of financing inclusive development in the State.