The implications of the recommendations of the Fourteenth Finance Commission on finances of Bihar as a result of changes in the tied, untied and overall union devolution are identified. The data reveals that there is an increase in tax devolution, but its share in grants, plan and non-plan, has come down drastically, hardly reflecting any increase in the total resources transferred. In reality, there has been a decrease of 1.3 percentage points in the share of tax devolution for Bihar between Thirteenth and Fourteenth Finance Commissions. Along with the revenue loss due to liquor ban, this loss has huge financial implications for Bihar’s exchequer.
