{"id":210388,"date":"2022-10-13T20:16:45","date_gmt":"2022-10-13T14:46:45","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=210388"},"modified":"2022-10-14T11:15:57","modified_gmt":"2022-10-14T05:45:57","slug":"measure-topography-to-ensure-the-equitable-delivery-of-goods-and-services-to-all","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/measure-topography-to-ensure-the-equitable-delivery-of-goods-and-services-to-all\/","title":{"rendered":"Measure topography to ensure the equitable delivery of goods and services to all"},"content":{"rendered":"\n<p><strong>Source<\/strong>&#8211; The post is based on the article <strong>\u201cMeasure topography to ensure the equitable delivery of goods and services to all\u201d <\/strong>published in <strong>The Indian Express <\/strong>on <strong>13th October 2022<\/strong>.<\/p>\n<p><strong>Syllabus: <\/strong>GS2- Federalism<\/p>\n<p><strong>Relevance<\/strong>&#8211; Central and state finances<\/p>\n<p><strong>News-<\/strong> The article explains the creation of the Finance Commission. It also explains the need for improvement in methodology for fund transfers to states by the Finance Commission.<\/p>\n<h5><strong>What is the history behind the Finance Commission?<\/strong><\/h5>\n<p><strong>Government of India Act, 1935<\/strong> had provision for grants in aid to provinces in need of assistance.<\/p>\n<p><strong>Niemeyer Report (1936), Krishnamachari Enquiry Committee Report (1949) and Sarkar Committee Report (1948) <\/strong>also suggested creation of such a body.<\/p>\n<h5><strong>What is the logic behind creation of the Finance Commission?<\/strong><\/h5>\n<p>The basic idea behind its creation is <strong>equity<\/strong> <strong>between states<\/strong>.<\/p>\n<p>State has to provide a basket of goods and services. The states have differential sources of revenue. Cost of delivering these things also varies across states.<\/p>\n<p>The cost of delivering social and physical infrastructure also varies across states.<\/p>\n<h5><strong>Why topographical area rather than geographical area needs to be considered for devolution of funds to states?<\/strong><\/h5>\n<p>Calculating the costs is not easy. The Finance Commission has more challenging tasks vertical as well as horizontal distribution of resources.<\/p>\n<p>There are broadly three approaches used by the Finance Commission to measure fiscal capacity- (a) expenditure equalisation based on costs of public services; (b) revenue equalisation measured by the ability of the state to raise revenue from one or more sources; and (c) macro-indicators that estimate fiscal capacity.<\/p>\n<p>The cost of expenditure incurred by states is mostly measured through geographical area and population. Larger the area, the larger the expenditure.<\/p>\n<p>But geographical area alone is not sufficient to calculate the expenditure requirement. Topography also matters. The cost of infrastructure creation is not the same across plains and hilly areas.<\/p>\n<p>Cost calculation should be based on topographical area. Improvement in technology has made it possible to calculate it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source&#8211; The post is based on the article \u201cMeasure topography to ensure the equitable delivery of goods and services to all\u201d published in The Indian Express on 13th October 2022. Syllabus: GS2- Federalism Relevance&#8211; Central and state finances News- The article explains the creation of the Finance Commission. It also explains the need for improvement&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/measure-topography-to-ensure-the-equitable-delivery-of-goods-and-services-to-all\/\">Continue reading <span class=\"screen-reader-text\">Measure topography to ensure the equitable delivery of goods and services to all<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10500],"class_list":["post-210388","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704697234},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/210388","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=210388"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/210388\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=210388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=210388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=210388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}