What is the significance of the Finance Commission in India's fiscal federalism?

The Finance Commission in India plays a crucial role in the country's fiscal federalism system. It is an independent constitutional body that is responsible for recommending the distribution of financial resources between the central government and the state governments. The Commission's significance lies in its mandate to ensure a fair and equitable allocation of resources to promote balanced regional development and address the fiscal needs of the states. By determining the share of taxes and grants to be assigned to the states, the Finance Commission helps in reducing regional disparities and promoting cooperative federalism. It also plays a vital role in enhancing the fiscal autonomy of the states and encouraging efficient and effective fiscal management. Overall, the Finance Commission acts as a vital mechanism in India's federal system, ensuring a fair financial framework and fostering cooperative relations between the center and the states.

This mind map was published on 7 August 2023 and has been viewed 94 times.