State Finances and Coordination

The State Finances and Coordination Vertical was formed by merging the Financial Resources Vertical and the State Coordination Vertical with effect from May 2020. The Vertical seeks to strengthen coordination with States and serve as a single point of contact for all matters pertaining to finances of States and multi-State issues.

• The Vertical has been entrusted with the responsibility of maintaining a State-wise database on macroeconomic, financial, fiscal and social indicators; assessing the financial health of the States, including the assessment of transfers from the Centre to the States; and fostering cooperative federalism through structured support and initiatives.  

• The Vertical is committed towards providing inputs in the formulation of policies and pushing for reforms in fiscal matters. The issues related to the Finance Commission, funding requests for special projects and inter-governmental transfers are also handled by the Vertical.  

• It is the nodal department for all recommendations made from NITI Aayog to the Department of Expenditure, Ministry of Finance, for ‘special assistance’ to the States, under the demand ‘Transfers to States’.   

• The Vertical deals with matters pertaining to development support services for States/UTs for infrastructure projects.   

• The Vertical also acts as the nodal for coordinating the work related to the United Nations Sustainable Development Framework (UNSDF) 2018–22, including meetings of joint steering committees co-chaired by VC, NITI Aayog, and UN Resident Coordinator of India. UNSDF 2018–22 is a five-year roadmap signed by the Government of India, through NITI Aayog, and the UN Resident Coordinator in India, outlining the action-oriented response of UN agencies to key national developmental priorities, integrating the Sustainable Development Goals.  

• The State Finances and Coordination Vertical coordinates with different Ministries/Departments and Verticals within NITI Aayog for action taken on issues raised by the States in the Governing Council meetings.  

• The Vertical also deals with all matters/issues involving multiple states, including coordination of multi-State projects for multilateral funding with the Department of Economic Affairs, Ministry of Finance.

United Nations for United Nations Sustainable Development Framework (UNSDF) 2018–22

Department of Expenditure, Ministry of Finance

• State Finances of Kerala 

• State Finances of West Bengal

• Fiscal Scenario in Punjab: Past Trends, Future Prospects and Challenges

• Social Sector Expenditure of States: Pre and Post Fourteenth Finance Commission 

• As an annual exercise, the Vertical prepares States’ fiscal health profiles, which are an effective at-a-glance summary of their financial health. The same is being prepared for FY 2021–22 on the basis of State budgets.   

• Compilation of standardised State factsheets to provide at-a-glance summary of their performance across different sectors, such as economic growth, agriculture, industry, labour and employment, fiscal affairs, health and education, water and sanitation, urbanization, etc.  

• Strengthening the mechanism for States to interact with the Centre and vice versa by streamlining and facilitating smoother and well-informed interactions between them.  

• Three meetings of the joint steering committee on UNSDF have been held. Seven focal groups have been formed in the following priority areas to take stock of results and mid-course correction (if any): (i) poverty and urbanisation; (ii) health and WASH; (iii) nutrition and food security; (iv) gender and youth; (v) education and employability; (vi) climate and energy; (vii) skilling and job creation. Action has been taken in each of these groups.  

• Further, two Covid response plans or frameworks have been formulated: (i) Novel Coronavirus Disease Joint Response Plan, led by WHO in support of the Government’s epidemiological response; and (ii) UN Socio-Economic Recovery Framework Response, led by UNDP, in support of the Government’s socio-economic recovery efforts.  

• Discussion to be held for review of implementation of UNSDF 2018–22, including its evaluation framework and roadmap for formulation of the United Nations Sustainable Development Cooperation Framework (UNSDCF) 2023–27.