Q.3 Instances have come to light where states with highest debt-to-GDP levels take fiscally profligate actions. In this regard, analyse how fiscal devolution is causing a lack of state-level fiscal responsibility and what needs to be done to improve it? (10 Marks)

Mentor’s Comments- https://www.livemint.com/opinion/online-views/india-should-incentivize-state-level-fiscal-responsibility-11667752420919.html In the introduction, write about Rajasthan, Chhattisgarh and Punjab governments restoring the old pension scheme. In the body, begin with briefly mentioning the importance of fiscal devolution. Then, write on how it is leading to a lack of state-level fiscal responsibility. Suggest a way forward. Conclude suitably.