more-inThe government’s mandate and responsibility to control the States’ fiscal deficit means that it has the power to control their finances even at a time of large-scale loan waivers by a number of states, 14th Finance Commission Secretary A.N. Reddy’s book, at which Mr. Reddy said that giving the States more fiscal powers actually brought a greater element of control. Speaking about the prospect of public sector bank mergers, Mr Reddy said: “If the inherent problem in banks is poor governance, then this will not be fixed by merging two poorly governed banks. “If states waive off farmers loans, the finances will have to come from somewhere else. The Finance Ministry can take steps to control it.”“By giving more powers to the States, you are actually with more powers.” Mr. Reddy said.

Source: The Hindu June 27, 2017 17:03 UTC