THE NEED:

The last few years in the economic history of the country have been path breaking, which has witnessed two major policy reforms in the form of passage of Constitution (One hundred and first Amendment) Act 2016 paving the way for implementation of Goods and Services Tax (GST) from the year 2017-18 and withdrawal of Specified Bank Notes of Rs.500 and Rs.1000 denomination. These measures would undoubtedly make the Indian economy bigger, cleaner and more organized.

Similarly, three reforms in the budgetary process have been carried out namely, doing away with Plan and Non-Plan classification, merger of Railway Budget with the General Budget from the financial year 2017-18 onwards and preponement of presentation of the Budget to complete its approval process well before the commencement of the new financial year.
On the pattern of the Union Government initiative, Government of Haryana has also decided to dispense with the Plan and Non-Plan classification of expenditure and prepare the Budget in terms of revenue and capital classification, which would give holistic view of sectoral allocations, leading to optimal allocation of resources to Departments.

On the international front, the global community, after dedicated and consistent efforts over many years, has developed an agenda that promises to address the concerns of human development for all while ensuring the health of the planet and its ecosystems. The SDGs 2030 adopted by the United Nations in 2015 is a unique participatory exercise that has led to the design of 17 Goals that address the key concerns of humanity and 169 interlinked targets within these goals that reflect the complex and interrelated nature of social, economic and ecological well-being parameters.

These ambitious and aspirational SDGs call for significant rethinking in development processes across the world. They also call for significant resources to be dedicated and invested in priority areas as identified in the framework of goals and targets for each Member State. The SDGs will be more ambitious than the MDGs, covering a broad range of interconnected issues, from economic growth to social issues to global public goods. To realize this vision, a just-as-ambitious plan for financing and implementation is needed. The magnitude of the SDG financing challenge far exceeds the capacity of any one organization and demands a strong partnership among Governments, the private sector, and development organizations.

The SDGs will have very significant resource implications worldwide. For India, the first level of estimates indicates a financial shortfall of INR 533 lakh crores (USD 8.5 trillion) over the mandated 15 years for achieving SDGs1. Per year, on average, this works out to INR 36 lakh crores or USD 565 billion. It is also clear that public finance alone would be inadequate and even the private finance available may not be able to meet the gaps being estimated. There is a need to reassess financial requirements from a perspective of innovative policy strategies to address the core needs of poverty eradication, gender, equity, governance issues, sustained growth, investment in fundamental natural resources and climate response, in a synchronized and systemic manner. With more financial resources landing at the doorsteps of the States, it is imperative that the State Governments also start to evolve into a modern and robust Fiscal Management system as a whole.

Fiscal risks could arise from the unexpected sources. Considering the macro-economic and fiscal meltdown in India during the global economic and financial crises of 2008, proper implementation of the policies, establishing an accountability framework and finding different ways to improve delivery of public service remain key concern in India. In such scenario, a sound PFM (Public Financial Management) system is the best alternative to improve the institutional efficiency and to design and implement appropriate policies to achieve the desired results.

Though the new scenario throws up a completely new role of States in India, however, the state capacities to work in these new areas needs augmentation. At the center Niti Ayog plays a key role for the Government of India to be ready for THE NEW INDIA Vision of the honorable Prime Minister. State level organizations for providing high quality, empirically-driven and context-based policy inputs have never been given any priority though they account for more than the half of the combined Union and State Government expenditure. So, it is imperative for the states to increase the quality of their PFM and help provide quality inputs to the Finance Ministry at the State Level.

The mandate is a State level autonomous Fiscal Management Institute which should be capable to undertake policy relevant PFGM research, capacity enhancement of officials and related functions with a special focus on SDGs.