Freebies or Infrastructure: Arvind Panagariya's Take on State Priorities

Arvind Panagariya, Chairman of the 16th Finance Commission, emphasizes the choice between state-provided freebies and better infrastructure. Highlighting the responsibility of the electorate in decision-making, he urges voters to prioritize amenities like roads and water supply over direct monetary benefits. Goa seeks increased fund allocation and changes in revenue sharing.

Arvind Panagariya, the 16th Finance Commission's Chairman, raised critical questions regarding the choice between state-funded freebies and necessary infrastructure improvements, such as roads and water supply. He emphasized that citizens ultimately decide these priorities through their voting choices.

During a recent interaction post a meeting with Goa's top ministers, Panagariya noted that while funds allocated for infrastructure projects must be utilized for that purpose, elected governments have the final say. He underlined that the Finance Commission can only provide guidance on macroeconomic stability, not dictate state expenditure decisions.

The meeting highlighted Goa's demand for a four-fold increase in its share of the divisible pool of funds for special projects, along with an appeal to raise states' share of the Centre's revenue distribution to 50 percent. Panagariya also mentioned discussions around modifying the income distance criterion to prioritize Sustainable Development Goals and fiscal efforts.

(With inputs from agencies.)