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Initiatives aimed at enhancing productivity, reducing transmission and distribution losses, rationalising tariffs in accordance with the underlying cost of power supply, unbundling the electricity supplyindustry, and privatising generation and distribution remain critical and would significantly improve the quality of state finances.It also flagged that too many central government schemes reduce flexibility of state government spending and dilute the spirit of cooperative fiscal federalism.

It suggested that rationalisation of centrally sponsored schemes can free up budgetary space to meet state-specific expenditure needs and reduce the fiscal burden of both the Union and the state governments.It said the state governments have made progress in fiscal consolidation, while there is scope for further improvement.Arunachal Pradesh CM Pema Khandu addressed concerns and misinformation about the Siang Upper Multipurpose Project, stressing its national significance in protecting the Siang River and its communities from Chinese hydropower developments.

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