Narendra Modi, Prime Minister of India, has been revealed to have engaged in backdoor negotiations with the Finance Commission of India in 2014 to decrease the funding allocated to Indian states. However, the head of the commission stood firm against Modi’s attempts.
Despite claiming in Parliament to welcome the Finance Commission’s recommendations on tax allocation, Modi’s government was forced to redo its budget within 48 hours and cut funding across welfare programs. BVR Subrahmanyam, CEO of the government think-tank NITI Aayog, revealed these revelations in a seminar on financial reporting in India.
Subrahmanyam disclosed that the federal budgets are covered in layers of attempts to cover the truth and delved into a case of financial misconduct in a government-funded infrastructure project. The federal government raised funds by increasing the collection of cess and surcharges, which are not shared with states. Furthermore, the government’s allocation of funds for welfare schemes was cut significantly.
Subrahmanyam also criticized the government for using accounting tricks and sometimes committing plain fraud to avoid revealing the levels of debt. Additionally, Modi has been accusing opposition-governed states of indulging in a “revdi culture” referencing traditional sweetmeats and disparagingly likening welfare schemes to distributing sweets or freebies to people.
Overall, the federal government’s continued attempts to restrict states’ financial independence have drawn criticism from Subrahmanyam and others.