The US Supreme Court Justice Louis Brandeis is often attributed for coining the phrase “race to the bottom” in Louis K Liggett Co. v. Lee (1933). Brandeis termed the race between the States for watering down rules and regulations to entice industry in their jurisdictions as “one not of diligence but of laxity”. But there is also a race towards the bottom between several Indian States today.
What are the issues?
Problem of finance –
Issues with State Finance Commission –
Way forward –
Finances at the Union level are always under the democratic gaze. However, some states contravene the Constitutional provisions repeatedly without any repercussions. States should devolve more powers and resources to local bodies. Intergovernmental competition should not just be confined to the race to the bottom but the other way around.
Source – The Hindu Business Line
QUESTION – Local bodies are marred with several problems but the root cause of many of these problems is finance or the lack of it. Comment.