ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Equalising Transfers through the Finance Commission

This article discusses the issues that the Thirteenth Finance Commission has to address to enable it to design a scheme of transfers that is just and fair to all states. A significant fiscal correction took place in most states over the last four years. The most important trend that has emerged is the differing significance of transfers to the rich and poor states. It is imperative that the thFC accepts the concept of equalisation as the guiding principle in deciding transfers. Another issue it may have to address is the mix of tax share and grants.

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