Good governance and fiscal decentralization are attuned in our country through co-operative govern the unitary state with its system of fiscal decentralization has been institutionalized in Intergovernmental Fiscal Relations.
A fiscal decentralized framework addresses the question of appropriate level of centralization by assigning competency to tax; spending and regulatory response to the various spheres of government and the interface with the private sector and civil society, framework assigns responsibility to that sphere of government at the coalface of delivery. How fiscal decentralization is not automatically better than fiscal centralization.
Sub-national governments often pursue “self-interest” policies and strategies seeking a “free-rj with no accountability and undermining national unity”. The principle of co-operative governance is essential catalyst to overcoming this problem. Of course any system of good governance requires« only political will and well-functioning accounting and financial management systems but also information systems of integrity and accessibility an information system is a set of people, procedures and resource that collects, transforms and disseminates information in an organization.
For example, the National Rural Employment Guarantee Scheme is a good example of being used as a political instrument.
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It is important for the governments, and not just from the perspective of elections, to potentially adverse outcomes and offer some credible contingency plans in the budget.
To put it in a nutshell, the Budget is all about finding a balance between political objectives economic uncertainties, between instant fiscal gratification and consolidation of the very real have been achieved over a period of time. How the finance minister deals with these issues, and others, will determine both how the Budget is received as economic policy and its effectiveness as political instrument.