The 15^th Finance Commission headed by Chairman, Shri N.K. Singh along with its Members and senior officials began its Karnataka visit with an interaction with economists.

A number of issues relating to the Terms of Reference of the Finance commission was discussed which include:

• Issues related to incentivising States on various performance indicators was discussed - Experts gave their extensive suggestions on the design of such incentives and potential indicators.
• Experts while commending Karnataka’s good fiscal performance, highlighted the large regional inequality which exists within the State. Similar regional inequalities in other major states in India were also discussed along with some possible solutions.
• In the area of democratic decentralization, in which Karnataka is a pioneer, various recent studies and trends related to third tier of government were discussed. Experts raised concerns regarding large infrastructure gaps and democratic deficit which persists. With regards to urban local bodies, special attention was drawn towards increasing fiscal need due to rapid urbanization, suggestion related to better revenue collection and some measures to improve land management were given to the Commission.
•  Experts also raised the issue of use of population data of census 2011 by the Commission. Most of the Experts were of the opinion that latest population data must be used as that represents the present needs of the States. However, incentives should be designed for States which have done better population control.
• Suggestions on the issue of intergovernmental transfers through Centrally Sponsored Schemes, revenue deficit grants and other specific purpose grants were also discussed

          The economists who were present at the interaction with Chairman Shri N. K. Singh and members of the Finance Commission include - Mr.T R Raghunandan Formerly Joint Secretary, Ministry of Panchayati Raj;  Dr. Jyotsna Jha,  Director, Centre for Budget and Public Policy;   Dr. Rupa Chanda Professor, IIM, Bangalore; Dr. Narender Pani Professor, NIAS;  Mr.Venkat Rao Ghorpade; Mr.H.A.C Prasad,  Secretary General, FKCCI;  Dr. Ashwin Mahesh CEO of Mapunity; Mr. Pranay Kotasthane, Head Research, Takshashila Institution, Bangalore; Mr. M Govinda Rao, Emeritus Professor, NIPFP& Councillor, Takshashila Institution, Bangalore; Dr. S.S. Meenakshisundaram Visiting Professor, National Institute of Advanced Studies, Bengaluru;  Dr. Kala Sridhar,  Professor,  Institute for Social and Economic Change, Bengaluru;  Dr. D. Rajashekher Professor, Institute for Social and Economic Change, Bengaluru; Prof. R S Deshpande, Former Director,  Institute for Social and Economic Change, Bangalore;  Mr. M G Chandrakanth, Director,  ISEC and   Dr.  S R Keshava,  Professor,  Department of Economics, Bangalore University.

Fiscal incentives for states proposed to align transfers with performance, population control and local governance needs. Experts advised the Finance Commission on designing fiscal incentives tied to State performance, addressing regional inequality, and reforming intergovernmental transfers. Discussion focused on financing for democratic decentralization and urban local bodies, improving local revenue collection and land management, and using updated population data for allocations while incentivising population control. Modalities of Centrally Sponsored Schemes, revenue deficit grants, and specific purpose grants were reviewed to align transfers with equity and performance.