The NITI Aayog, in 2017, had called for Competitive Cooperative Federalism to define the relationship between the Centre and the States. This concept puts the burden of transforming India into the hands of the State governments. In recent times, this concept has gained prominence following the participation of the Chief Secretaries of all States and Union Territories in the presentation of the best practices in each of their jurisdictions. However, NITI Aayog must take the necessary steps to analyse the ground reality so as to provide equal grounds to all the states – including those that are economically and socially marginalized.
On 24th March 2020, Prime Minister Narendra Modi had announced a nation-wide lockdown, from 25th March 2020 to 14th April 2020. The nationwide lockdown aims to combat the COVID-19 outbreak that is infecting thousands of people across the country and is intended to enable the concept of “social distancing” to contain the spread of the virus. The lockdown has legal backing based on Epidemic Diseases Act, 1897 and Disaster Management Act, 2005.
With the decreasing revenue and increasing expenditure, the Finance Minister took the fiscal expansion path not just for the current fiscal, but also for the next fiscal. This is despite over 37% reduction in food subsidy and nearly 11% reduction in fertilizer subsidy. The deficit for the current fiscal is to be 3.8% as against 3.3% announced in the last year’s budget. This was done by making use of Section 4(2) of the FRBM Act that provides for the deviation from the estimated fiscal deficit. The government argued that this fiscal path aims for fiscal consolidation without compromising the investment needs from the public funds. This shows that there is a need for a comprehensive investment on the capital front to ensure an increase in the revenue for the government and reform in the FRBM Act to make sure that the targets set by this law are achieved.