Report of Tenth Finance Commission

Report of Tenth Finance Commission S Guhan In the sequence of Finance Commission Reports, the Tenth Finance Commission's is among the outstanding ones. The commission has had to carry out its remit in a particularly difficult fiscal situation. Its projections of resources and requirements may not turn out to be realistic, hut they set fair and reasonable goals. The commission has been stingy in respect of vertical shares and debt relief but in the current fiscal context this is not unforgivable. The adoption of an identical formula, predominantly based on population and the distance criterion, is a reform that is sound and progressive in its economic logic. The grants to local bodies, the establishment of a National Fund for Calamity Relief and the chapter on defence expenditure are noteworthy initiatives. The 'Alternative Scheme' suggested by the commission, though flawed and inadequate in its present form, may prove to be an important contribution if it stimulates thought and action on a rational restructuring of federal fiscal transfers.