Fiscal federalism in India is strained by shrinking state autonomy, centralization of revenues under GST, and rising cesses that narrow the divisible pool. To restore balance, the 16th Finance Commission must expand untied transfers, streamline CSS, and rebuild fiscal trust for equitable regional development.
Click to View MoreThe Supreme Court’s order restoring MGNREGS funding to West Bengal reinforces the right to work and judicial oversight in welfare delivery. Arising from fiscal federalism tensions, it stresses the need for stronger social audits and cooperative Centre-State relations to safeguard rural livelihoods and accountability.
Click to View MoreThe PM-SHRI scheme, a Centrally Sponsored initiative, aims to upgrade 14,500 schools into model institutions aligned with NEP 2020, featuring modern infrastructure and green practices. Kerala, initially hesitant over NEP concerns, joined the scheme to access pending central funds, reflecting federal and policy dynamics.
Click to View MoreFiscal relations in India define how financial powers, taxation rights, and expenditure responsibilities are shared between the Centre and the States. The introduction of GST has centralised major taxation powers, reducing States’ fiscal autonomy and increasing their dependence on Central transfers, which account for about 44% of their total revenues. Rising cesses and surcharges outside the divisible pool further limit States’ resources. To strengthen cooperative fiscal federalism, India needs reforms such as expanding States’ tax share, including cesses in the divisible pool, rationalising centrally sponsored schemes, and empowering local governments for better fiscal balance and accountability.
Click to View MoreThe launch of GSTAT, under the CGST Act 2017, marks a major reform as India’s unified appellate forum for GST disputes. With judicial-technical expertise and a digital-first approach, it ensures speedy, uniform justice, reduces litigation, boosts business confidence, and improves ease of doing business.
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