ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Some Hits and Misses

The Fourteenth Finance Commission has come up with some bold and game-changing recommendations such as an increase in the tax share going to states from 32% to 42%, setting up of the Fiscal Council to make the centre accountable, and doing away with direct transfers to states under centrally-sponsored schemes. But unlike the Thirteenth Finance Commission the FFC has not bothered to estimate the impact of the Goods and Services Tax and disinvestment proceeds on gross domestic product as well as fiscal space. The discontinuation of the practice of giving special weight to a Fiscal Discipline Index, started by the Eleventh Finance Commission is an unwelcome development. This, coupled with the provisions of the revenue deficit and untied grants, is likely to encourage fiscal profligacy among several states.

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