Articles by G Thimmaiah

The proposal to extend reservations to the private sector has generated mixed reactions. The private sector is divided on the idea. The issue may go yet again to the Supreme Court. The implications of the proposal could be that labour productivity in the private sector may decline, the undeserving among the SC/STs and OBCs may get most of the benefits as they have managed to in the public sector in the past and for the really marginalised SC/STs reservations may not mean much as they are not equipped to avail of the benefits.

The quiet indifference with which the appointment of the Twelfth Finance Commission has been greeted in academic and state government circles bears testimony to the decline of the Finance Commission as a constitutional institution. Against this backdrop it is useful to try to understand the true intentions of the framers of the Constitution and to bring out the many ways in which powerful sections of society have manipulated the composition, terms of reference and even the recommendations of successive Finance Commissions to serve sectional and regional interests.

State and Right to Education G Thimmaiah S P SATHE in his article on the Supreme Court judgment in the Mohini Jain vs Karnataka case [EPW, August 29] has analysed the implications of the judgment. In particular he has examined the socioeconomic implications of the questions whether the right to education is a fundamental right, whether capitation fee is violative of the right to equality and whether the state should provide education at all levels. While examining the question: "Must the state provide educational institutions at all levels?", he has failed to provide logical justification for state intervention in higher education. He has argued: "If primary education is required for enabling people to live with dignity and therefore must be made a fundamental right, higher education will provide competent manpower for performing various services for society. Society requires able administrators, efficient professionals like doctors, engineers, chartered accountants and lawyers, competent technologists and scientists and various social scientists and scholars of humanities who would maintain the high cultural level of social life. The money spent on higher education is a good investment in human development" (p 1848]. This textbook justification of state intervention in higher education creates more contusion than the Supreme Court judgment. State intervention does not necessarily ensure excellence in education as it has been borne out by the past 45 years of our experience. It can at the most provide opportunities for those who do not have means but possess eligibility to get the benefit of higher education. In a country which is short of investible resources, both at the central and state levels, it would be self-defeating if any government attempts to provide all levels of education to the people. Therefore, one has got to decide about the priority and this priority has been very clearly indicated by the Constitution. Without understanding the priorities set by the Constitutional provisions, if we ask the government to provide all levels of education, we will be left with the large majority of the people without elementary education. Sathe in an attempt to characterise capitation fee as a source of inequality in education, has forgotten that his justification for state intervention in higher education will be much more in- equitous in the Indian context. This needs some elaboration.

Poverty Measures and Their Relevance for Tax Devolution G Thimmaiah AMARESH BAGCHI AND UMA DUTTA ROY CHOUDHURY in their paper (April 15, pp 831-836), have argued that the poverty ratio as well as other indices of backwardness have no relevance for inter se distribution of tax devolution. In support of their argument they have maintained that since the main objective of financial devolution in a federation is to reduce wide disparities in the levels of public services, the Ninth Finance Commission (NFC) should formulate its scheme of tax devolution with a view to equalising the revenue raising capacity, of the states. There are two issues involved in their contention. First, whether poverty or any other measure of backwardness can be used as an indicator of the relative revenue raising capacity of the states, and second, whether the poverty ratio as it is presently estimated can be used by the NFC inter se distribution of tax devolution. Their answers to both the questions are negative. While their arguments against the use of poverty ratio as a supplementary criterion for tax devolution is only partially convincing, their contention that it cannot be used lor measuring the relative disparities in revenue raising capacity of the states is not convincing. It is possible to use the poverty ratio as an indicator of revenue raising capacity. But it is not advisable to use it because: (i) per capita SDP and poverty ratio are to some extent positively associated and therefore, better-off states (judged in terms of per capita SDP) which can finance their expenditure needs to a large extent from their own revenues tend to receive more tax devolution, and (ii) the poverty ratio as it is presently estimated involves many deficiencies. Therefore, it is advisable to use a composite index of development for inter se distribution of tax shares.

Terms of Reference of Ninth Finance Commission Further Comment G Thimmaiah IN his reply (EPW, November 28, 1987) BPR Vithal (BPRV) has maintained that (i) my defence of the use of the word 'shall' in the terms of reference of the Ninth Finance Commission (NFC) amounts to defending the right of the union government to give directions to the commission; (ii) my justification of the union government's directive to adopt normative approach on the excuse that past Finance Commissions failed to develop a more appropriate approach is an insult to the commissions; and (iii) my extensive advice on how to opera- tionalise the normative approach is naive and based on unrealistic premises.