The 15th Finance Commission met the Reserve Bank of India Governor Shaktikanta Das and other senior functionaries of the Central bank in Mumbai today, to discuss the necessity of setting up the state level commission.
The Commission and RBI Governor also discussed the public sector borrowing and ‘ continuity of the Finance Commission’.
During the meeting, on continuity of the Finance Commission, it was said that it is more required in view of the fiscal management requirements of the states, especially given the absence of mid-term reviews of awards granted by the Finance Commission, as it used to happen earlier with the awards granted by the Planning Commission.
The other issues that were discussed were the development of expenditure codes, especially given that norms vary from state to state and improving secondary market liquidity, release stated.
During the presentation, the RBI mentioned specific factors that would drive fiscal slippages in the revised estimates of 2018-19, including farm loan waivers and income support schemes.
The presentation also stated that in the past, states’ fiscal the position was stretched due to the Ujwal DISCOM Assurance Yojana (UDAY) bonds for the power sector.