Can we solve social problems through decentralisation and giving more power to panchayats?
Yes, undoubtedly. Decentralisation on expenditure alone will not solve the problem. Decentralization of revenues is also necessary. 55 per cent of the revenue being collected today is taken by the central government. That must change. The finance commission must start moving revenue back to the states. There must also be a kind of proximity to the revenue raised in the state and the money spent. Today, we have an anomalous situation where some of the better performing states like Kerala, Karnataka and Tamil Nadu are raising revenue which is being spent in UP or Bihar because of allocation. I don’t think it is possible for the politicians in Karnataka to keep explaining to their constituencies for long that while you are creating wealth, a lot of it has to be spent elsewhere. The guys who are creating wealth would like to see that their roads improve and their education system improves. All this will point towards better reforms on the fiscal side. Do you expect anything of that sort in
