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

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Upholding Fiscal Federalism

Terms of Reference of the Fifteenth Finance Commission

Upholding Fiscal Federalism

The appointment of the Fifteenth Finance Commission has come at a time of momentous changes in Indian fiscal federalism. The XV-FC has a challenging task in addressing these developments. A number of considerations in the terms of reference of the XV-FC, however, point to a bias in theToR towards the union government.

The appointment of the Fifteenth Finance Commission (XV-FC) by a presidential order on 27 November 2017 has come at a time of momentous changes in Indian fiscal federalism. The replacement of the Planning Commission by the National Institution for Transforming India (NITI) Aayog in January 2015, the removal of the distinction between plan and non-plan expenditure in the budgets of the union and the states from 2017–18, and the 101st constitutional amendment resulting in the introduction of the long-awaited goods and services tax (GST) from 1 July 2017 across the country are game changers in the area of fiscal federalism. Perhaps, such game changing developments did not take place in the period immediately preceding the appointment of any other commission.

The Impact of the Changes

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