Defence is a national public good; It’s the primary responsibility of the Centre

The constitutional assignments between the central and subnational governments in federations are done broadly on the basis of their respective comparative advantage.

Can states pay for defraying expenditure on items in the Union List? (Illustration by C R Sasikumar)

The amendment to the terms of reference (TOR) issued to the Fifteenth Finance Commission asking it to examine “..a separate mechanism for funding of defence and internal security ought to be set up and if so, how such a mechanism could be operationalised,” has triggered some suggestions on the need to have a relook at the assignment system and redesign of centrally sponsored schemes (CSS). In an interesting article, Bibek Debroy (IE, September 22) rightly states that the Seventh Schedule is not cast in stone and that if the Union government is required to contribute to CSS in the State List, why should states not contribute to items in the Union List like defence. He also states that any restructuring/rationalisation of the CSS requires a relook at the Seventh Schedule and that this must be done with consultation with the states in an appropriate forum. These suggestions are important and need to be discussed in some detail.