As of May 5, Assam has 43 confirmed cases of COVID-19. Of these, 32 have been cured, and 1 person has died. In this blog, we summarise some key decisions taken by the Government of Assam until May 5 for containing the spread of the pandemic in the state.
Movement Restrictions
For containing the spread of COVID-19 in the state, the Government of Assam took the following measures for restricting the movement of people in the state. On March 19, the Department of Health and Family Welfare issued an order for closure of all museums, libraries, coaching centers among others until March 31.
Lockdown: To further restrict the movement of individuals, in order to contain the spread of the disease, the state government enforced a state-wide lockdown from March 24 to March 31. The lockdown involved: (i) sealing the state borders, (ii) suspension of public transport services, (iii) closure of all commercial establishments, offices, and factories, and (iv) banning the congregation of more than five people at any public place. Establishments providing essential goods and services were excluded from the lockdown restrictions. Limited rituals were allowed in places of worship without any community participation.
This was followed by a nation-wide lockdown enforced by the central government between March 25 and April 14, now extended till May 18. Starting from May 4, based on the Ministry of Home Affairs guidelines, the state government has allowed certain activities with restrictions in green zones of the state. Activities such as e-commerce for all commodities, construction activities in urban areas, functioning of government and private offices among others are being allowed in green zones.
Health Measures
The Assam COVID-19 regulations, 2020: On March 18, the government issued the Assam COVID-19 regulations, 2020. These regulations are valid for one year. Key features of the regulations are as follows:
All government and private hospitals should have separate corners for the screening of COVID patients. Further, they should record the travel history of such persons during screening,
No hospital can refuse the treatment of suspected/ confirmed COVID-19 cases,
People travelled through affected areas must voluntarily report to the authorities, and
District administration can take necessary measures to contain the spread of COVID-19, such as (i) sealing a geographical area, (ii) restricting the movement of vehicles and people, and (iii) initiating active and passive surveillance of COVID-19 cases.
The Assam COVID-19 Containment Regulations, 2020: On March 21, the government issued the Assam COVID-19 Containment Regulations, 2020. These regulations detail the measures to be taken in case of community transmission within a geographical area. These include enhanced active surveillance, testing of all suspected cases, isolation of cases and home quarantine of contacts, among others.
Guidelines to Airports: On March 18, the government issued instructions regarding procedures to be followed at the airports for the screening of passengers. The guidelines allocate responsibilities such as thermal screening of passengers, counselling, transportation of passengers among others to various teams at the airports.
Medical colleges and Hospitals: On March 23, the Department of Health and Family Welfare directed all medical colleges and district hospitals to set up isolation wards. On March 27, the Department of Health and Family Welfare released measures to be followed in medical colleges and hospitals. These include: (i) seven days of training on critical care to all doctors, nurses, final year students of bachelor programs and Postgraduate students, (ii) Principals should set up a core team in every college for managing COVID-19 patients, among others.
Welfare measures
Food distribution: On March 28, the government decided to provide gratuitous relief such as rice, pulses among others to all wage earners, slum dwellers, rickshaw pullers, homeless, and migrant labourers living in municipal towns for seven days.
Minor Forest Produce (MFP): For enhancing the income of tribal farmers, the government revised rates of 10 MFPs such as honey, hill broom and added 26 new MFPs for Minimum support price in the state.
One-time financial assistance for persons stranded outside India: On March 22, the government announced one-time financial assistance of $2,000 to residents of Assam stranded in foreign countries. People who went abroad 30 days before the stoppage of international flights (on March 22) and are unable to return will receive this financial assistance.
Administrative measures
On March 21, the government constituted the task force at the State level and District level for implementation of various measures for containment of COVID-19 in the state.
On April 2, the government constituted a committee for monitoring and checking of fake news across all forms of media.
On April 29, the Department of Finance announced certain austerity measures in the context of the fiscal situation that arose due to COVID-19. These include suspension of MLA area development funds from April to July 2020, reduction in establishment expenditure, and a ban on the purchase of vehicles by the government (except ambulances and for policy duty).
For more information on the spread of COVID-19, and the central and state government response to the pandemic, please see here.
In November 2017, the 15th Finance Commission (Chair: Mr N. K. Singh) was constituted to give recommendations on the transfer of resources from the centre to states for the five year period between 2020-25. In recent times, there has been some discussion around the role and mandate of the Commission. In this context, we explain the role of the Finance Commission.
What is the Finance Commission?
The Finance Commission is a constitutional body formed every five years to give suggestions on centre-state financial relations. Each Finance Commission is required to make recommendations on: (i) sharing of central taxes with states, (ii) distribution of central grants to states, (iii) measures to improve the finances of states to supplement the resources of panchayats and municipalities, and (iv) any other matter referred to it.
Composition of transfers: The central taxes devolved to states are untied funds, and states can spend them according to their discretion. Over the years, tax devolved to states has constituted over 80% of the total central transfers to states (Figure 1). The centre also provides grants to states and local bodies which must be used for specified purposes. These grants have ranged between 12% to 19% of the total transfers.
Over the years the core mandate of the Commission has remained unchanged, though it has been given the additional responsibility of examining various issues. For instance, the 12th Finance Commission evaluated the fiscal position of states and offered relief to those that enacted their Fiscal Responsibility and Budget Management laws. The 13th and the 14th Finance Commissionassessed the impact of GST on the economy. The 13th Finance Commission also incentivised states to increase forest cover by providing additional grants.
15th Finance Commission: The 15th Finance Commission constituted in November 2017 will recommend central transfers to states. It has also been mandated to: (i) review the impact of the 14th Finance Commission recommendations on the fiscal position of the centre; (ii) review the debt level of the centre and states, and recommend a roadmap; (iii) study the impact of GST on the economy; and (iv) recommend performance-based incentives for states based on their efforts to control population, promote ease of doing business, and control expenditure on populist measures, among others.
Why is there a need for a Finance Commission?
The Indian federal system allows for the division of power and responsibilities between the centre and states. Correspondingly, the taxation powers are also broadly divided between the centre and states (Table 1). State legislatures may devolve some of their taxation powers to local bodies.
The centre collects majority of the tax revenue as it enjoys scale economies in the collection of certain taxes. States have the responsibility of delivering public goods in their areas due to their proximity to local issues and needs.
Sometimes, this leads to states incurring expenditures higher than the revenue generated by them. Further, due to vast regional disparities some states are unable to raise adequate resources as compared to others. To address these imbalances, the Finance Commission recommends the extent of central funds to be shared with states. Prior to 2000, only revenue income tax and union excise duty on certain goods was shared by the centre with states. A Constitution amendment in 2000 allowed for all central taxes to be shared with states.
Several other federal countries, such as Pakistan, Malaysia, and Australia have similar bodies which recommend the manner in which central funds will be shared with states.
Tax devolution to states
The 14th Finance Commission considerably increased the devolution of taxes from the centre to states from 32% to 42%. The Commission had recommended that tax devolution should be the primary source of transfer of funds to states. This would increase the flow of unconditional transfers and give states more flexibility in their spending.
The share in central taxes is distributed among states based on a formula. Previous Finance Commissions have considered various factors to determine the criteria such as the population and income needs of states, their area and infrastructure, etc. Further, the weightage assigned to each criterion has varied with each Finance Commission.
The criteria used by the 11th to 14thFinance Commissions are given in Table 2, along with the weight assigned to them. State level details of the criteria used by the 14th Finance Commission are given in Table 3.
Grants-in-Aid
Besides the taxes devolved to states, another source of transfers from the centre to states is grants-in-aid. As per the recommendations of the 14th Finance Commission, grants-in-aid constitute 12% of the central transfers to states. The 14th Finance Commission had recommended grants to states for three purposes: (i) disaster relief, (ii) local bodies, and (iii) revenue deficit.
