Expenditure priorities are a political issue. No wonder, consensus on subsidy reduction has eluded government after government: Yashwant Sinha rolled back fertiliser price increases like Manmohan Singh before him. The states have been dragging their feet on user charges for water, power, roads, etc. The centre too has developed cold feet on raising issue prices for foodgrains, after liberally hiking procurement prices. So, who is to bell the cat? The centre has to contend with opposition politics; the states too cannot duck confrontation. Working out a consensus between the centre and the states, and among political parties across the spectrum of over-lapping interest groups, requires a shared vision. But there is no vision to share. So, Manmohan Singh (wise man) talked of a medium-term adjustment path. This is plainspeak for responding to crises as they come.

It is fine to talk of getting the states to share the fiscal responsibility for the deficit with the centre.But how is responsibility to be apportioned? This year, excise revenues (shareable with the states) have slackened, but corporation tax revenues (going wholly to the Centre) have burgeoned! Besides, what expenditures must the states eschew to cope with the fiscal deficit: on health, education, agriculture, roads, minor irrigation, minor ports, power? These are all areas in which the states have a major responsibility. So what are the priorities, and what is the policy on which a consensus is to be sought?