Hindustan Times | Developed country ambitions need deep structural reforms

India’s impressive growth performance has raised hopes of it becoming a developed country in the not-too-distant future. The Prime Minister has set 2047, the centenary year of Independence, as the aspirational target year. However, leapfrogging from being a low middle-income economy to becoming a developed country in the next 25 years requires raising the country’s per capita income by more than five times, from $2,600 to $10,205. This effectively translates into a per capita income growth at 7.5% per year and an aggregate Gross Domestic Product (GDP) growth at 9%. Read the full article here.

Deccan Herald | States and tax shares: The fight for fiscal space

As southern states demand higher share in devolution of taxes, what can work in Karnataka's favour. Read the full article here.

Times of India | Why resource distribution is creating a North-South divide

Over the last few days, there have been calls to form an economic alliance of southern states for equal resource distribution. Chief ministers from states such as Karnataka, Kerala, and Tamil Nadu held demonstrations in New Delhi to express their discontent. The Karnataka chief minister claimed that the current system for distributing resources among states puts states like Karnataka at a disadvantage while favouring states in the North with uncontrolled population growth. While the states’ concerns are valid, this focus on the horizontal distribution of tax resources is misplaced. Instead, the states should advocate for an enlargement of the divisible pool by calling for a curtailment in Union cesses and surcharges. Here’s why: Read the full article here.

Rough Calculations on Agnipath’s Pension-Saving Potential show why the Change is Crucial

GoI’s official arguments for Agnipath don’t emphasise public finance implications of the policy. Although the media has discussed the unsustainability of the military pension status quo, the official press release said that the only motivation for the scheme is “attracting young talent from the society who are more in tune with contemporary technological trends and plough back skilled, disciplined and motivated manpower into the society”. But skirting fiscal reasons may have created an impression, at the popular level, that GoI needlessly foisted another disruptive scheme on unsuspecting masses. The reality is quite different.

Agnipath, a chance to transform India’s defense management

Now that India’s government has chosen the four-year tour of duty model as the way to respond to its budget constraint, the policy challenge is to ensure that it achieves the desired objectives, mitigates the downsides and pre-empts unintended consequences. Essentially, it is about understanding who might join the armed forces given these employment conditions, and how this new demographic will change the defence services and Indian society at large.