5.34           ndian      onom
     development. Major events may be counted as                      Commission to a great extent. Though the critics
     under:                                                           took it as an infringement of a constitutional body
           (i) The process of economic reforms started                by a non-constitutional one, the government
                 in 1991–92 required active economic                  clarified by calling it a symbol for promoting the
                 participation from the states.                       contemporary needs of the economy and fiscal
          (ii) The constitutional requirement of                      federalism.
                 ‘participatory       planning’         mandated           Another milestone was created in the
                 by the 73rd and 74th Constitutional                  enactment of the Fiscal Responsibility and
                 Amendments was enacted in 1993.                      Budget Management (FRBM) Act in 2003,
         (iii) The arrival of coalition era at the Centre             which empowers the state governments to go for
                 when over a dozen political parties,                 market borrowings to fulfil their plan expenditure
                 having regional affiliations came together           without prior permission from the Central
                 to form the government.                              Government (provided they have enacted their
                                                                      respective Fiscal Responsibility Acts).98 This
         (iv) The recommendations of the Tenth
                                                                      has boosted the participatory planning in the
                 Finance Commission followed by a
                                                                      country by guaranteeing greater autonomous plan
                 Constitutional Amendment making
                                                                      participation from the states.
                 Alternative Method of Devolution a law
                                                                           If we look at the tax reforms process, we see a
                 in 1995.
                                                                      general tendency of enabling the states to collect
          (v) Various new needs of the time, such as,
                                                                      more and more taxes, the Value Added Tax (VAT)
                 tax reforms, agricultural development,               being a glaring example by which almost all states
                 industrial expansion, etc.                           have been able to increase their gross tax revenue
           The year 2002 could be considered a                        receipts. The cause will be served more once the
     watershed in the area of promoting the states’                   economy goes for the proposed enactment of the
     need for financial resources in promoting their                  Goods and Services Tax (GST).
     developmental requirements. In July 2002, while                       In January 2015, the NITI Aayog replaced
     the government was setting up the Twelfth Finance                the Planning Commission, thus the comparison
     Commission (2005–10) the then Minister of                        between the latter and the Finance Commission
     Finance announced that in future the Planning                    no more exits, but it will always have its academic
     Commission will be playing more or less a role of                importance in the area of development planning
     collaborator to the Finance Commission. In the                   in the country. Such experiences of the past will
     same announcement, the government made one                       function as a directives for the policy makers in
     member of the Planning Commission, a member                      the future.
     of the Finance Commission too (a symbol of
                                                                           Meanwhile, the new body, the NITI, is totally
     physical and ideological connection between the
                                                                      different in its approach towards fund allocations
     two bodies).97 It was as if the government had
                                                                      to the states to promote the cause of development
     accepted the suggestions of the Fourth Finance
                                                                      planning. Basically, the states now sit in the NITI
       97.    In the 10th Plan, Som Pal was that common member in
              both the Commissions (who resigned from the PC once       98.     his should e considered a great fiscal freedom to the
              the UPA-I came to power). But this arrangement has been         states (which even the constitution could not forsee)
              followed by the government in all new Commissions since         and also making them behave with more responsibility
              then—with B. K. Chaturvedi and Prof. Abhijit Sen                in fiscal matters. ore than states have passed their
              (Members, PC) being the Additional Members of the 13th          Fiscal Responsibility Acts (FRAs) by now and are
              and 14th Finance Commissions.                                   borrowing from the market for their planned needs.