Re-Examining the Shared Spending Power Vis-A-Vis Social Sector Priorities: Lessons from Other Countries

Abstract

Any Federal system is based on cooperation and coordination but attach high importance to uniform living condition. Expansion of a "welfare state" necessitates expanding expenditure on social sectors, which have to be organized on a state-to-state basis in the interest of economy and efficiency and to allow diversities between different regions.

In Federal jurisdictions, the Union looks into matters of National importance while states are responsible for local and regional significance, which are associated with the welfare of the people. In the Indian Constitution, the enumeration of the lists was done to secure autonomy for the states. However, it has enabled the Union and the states to provide grants outside the limits of its legislative competence under Article 282 through Centrally Sponsored Schemes (CSS). This has brought forth the complexity of shared spending power or overlapping power, which significantly impacts the spending priorities of the States.

The present paper analyzes the impact of overlapping or shared spending power on social sector priorities of the states. Further, the paper re-examines Article 282 of the Indian Constitution with experiences from the U.S. and Australian Constitutional provisions.