NEW DELHI: Fifteenth Finance Commission Chairman N K Singh on Friday called for a stronger fiscal partnership between the Centre and states, pitching state-wise debt sustainability assessments, wider use of tax data, greater private capital mobilisation and GST Council-like mechanisms for financing shared infrastructure.
Addressing the Conference of State Finance Ministers and Finance Secretaries in New Delhi, Singh said India’s ambition of sustaining high growth and achieving “Viksit Bharat” would require both fiscal discipline and a concerted effort by the Union and states.
“We must move away from Centre versus states towards concerted action,” Singh said, arguing that the country needs to deepen cooperative federalism while allowing states to compete meaningfully on development outcomes.
Singh proposed that the Reserve Bank of India (RBI) or the Ministry of Finance, with support from the Comptroller and Auditor General (CAG), undertake independent, state-wise debt sustainability assessments. Such assessments, he said, should consider differences in growth, interest costs, revenue buoyancy and committed expenditure.
He also suggested extending the “pooled sovereignty” demonstrated by the GST Council to other areas.
“Can we extend that experience to other harder questions?” he asked, suggesting pooled financing mechanisms for shared infrastructure, urbanisation, agricultural value chains, logistics, transport and river basins.
On revenue mobilisation, Singh said the larger opportunity lies in using information rather than simply raising tax rates. He called for greater use of GST, income-tax, customs and corporate data, alongside AI and machine learning, to identify compliance gaps and broaden the tax base.
Economic Affairs Secretary Anuradha Thakur said that India’s partnership across governments and institutions had been central to the country’s economic progress, noting that it was “through and due to this partnership” that India today stands recognised for macroeconomic stability and fiscal prudence.
Thakur pointed to four sovereign rating upgrades by major international rating agencies over the past 16-17 months, including Japan Credit Rating’s recent one-notch upgrade of India’s rating from BBB+ to A-.
Singh also urged states to create a pipeline of bankable projects, improve risk allocation and make greater use of multilateral development bank financing to crowd in private investment.
On factor-market reforms, he stressed the need to lower the cost of capital, improve labour productivity through skills and apprenticeships, and make land more efficiently usable through better FSI and FAR norms, digital titles and time-bound approvals.
He also called for stronger municipal finances and property-tax systems while proposing a National Tourism Council on the GST Council model to improve coordination between the Centre and states on taxation, land, permits and tourism infrastructure.
“Strong Union cannot exist without strong states,” Singh said, stressing that India’s development would depend on cooperation, complementarity and trust across levels of government.
Thakur also noted that the global economic environment remained challenging and that the scale of transformation envisaged for India could not be financed through government budgets alone. Private-sector financing, she said, would therefore have to play a critical role, and this perspective should remain central to the deliberations of the conference.
Source: The Financial Express
