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8 NUJS J. Regul. Stud. 36 (2023)
Preserving Fiscal Autonomy in the Indian Social Policy Landscape: Addressing Centralization and Inter-Governmental Structures

handle is hein.journals/nujsjlry8 and id is 38 raw text is: NUJS Journal of Regulatory Studies PRESERVING FISCAL AUTONOMY IN THE INDIAN SOCIAL POLICY LANDSCAPE: ADDRESSING CENTRALIZATION AND INTER-GOVERNMENTAL STRUCTURES Gauthaman V Law Student at Institute of Law, Nirma University, email: gauthukut@gmail.com, ORCID ID: 0009-0000-8239-5808 Abstract This article explores the challenges posed by centralization in the social policy landscape and its impact on fiscal federalism. The proliferated use of Centrally Sponsored Schemes (CSS) has taken up a significant portion of the Indian social policy landscape; this has effectively allowed the central government to frame policy on matters in the State List. This has had considerable reverberations on the state's fiscal capacity as these schemes are co-funded. Fiscal autonomy is crucial for state governments as it allows them to design and implement social policies that are responsive to local needs and priorities, which as research show, are more effective in delivering policy outcomes comparing to CSS. Drawing on various studies on the workings of CSS, the article points out certain structural elements that hinder the effective working of these policies. Moreover, it is argued that the uniform application of a top-down scheme in a country like India is a sub-optimal policy solution to India's social problems. This is fundamentally because Indian states are extremely divergent as the data on health, education and economy shows; this implies that every state has different policy requirements and one single scheme framed for the entire nation by the Central Government cannot possibly accommodate the unique challenges and specific needs of all the states. Examining various international examples, the article argues for altering inter-governmental structures for creating a space for the contestation and negotiation of top-down and bottom-up policy priorities; where bottom- up inputs complement top-down planning. The Article suggests that, as successfully done by various countries, this can be achieved by introducing bilateral agreements or by creating an inter-governmental forum. Such a mechanism can strike a balance between prioritising national goals and mainlining sub-national autonomy in policymaking for optimal outcomes. Keywords: Fiscal federalism, fiscal autonomy, centrally sponsored schemes, social policy, public policy. 36

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