CHENNAI: If the recommendations of the 14th Finance Commission are to let intended benefits accrue to the States, then the Plan has to be delinked from the classification in budget documents and accounts, said Y V Reddy, former chairman, 14th Finance Commission and Former Governor, Reserve Bank of India.
Reddy, who was speaking at the Raja J Chelliah Memorial Lecture on Monday, said that the follow up move would be in line with how the Commission had submitted its recommendation in its report.
“It was formulated without reference to the distinction between Plan and non-Plan. A delinking will facilitate assessment, scrutiny and approval of all expenditures in a sector or activity, or department in a comprehensive manner and not only incrementally.”
He also spoke extensively on the bigger role that the state governments will have to play now that they have been granted larger fiscal freedoms.
“The States can take full advantage of the experience gained from various strategies and programmes in other States, now that they have a greater autonomy in deciding some of their strategies and schemes,” said Reddy.
“The plan mindset should be replaced with a development mind set, of which Government budgets are only an element,” he added.