Finance Commission

Centrally Sponsored Schemes have complemented state fiscal capacity by improving access to essential public services while reducing regional disparities

Officials said the proposed measures intended to improve the financial health of local bodies and help them undertake development works with greater financial independence

CM A Revanth Reddy says Telangana is on track for a $1 trillion economy by 2034, backed by major infrastructure projects, investment, skilling and fiscal discipline

The 16th Finance Commission tilts Centre-state fiscal ties by retaining 41% tax devolution while ending revenue deficit grants, raising concerns over fiscal balance

The commission did not recommend revenue deficit grants to states or any sector-specific or state-specific grants

While aggregate finances remain stable, high debt and welfare handouts weigh on some budgets

An EAC-PM study finds women's cash-transfer schemes improve savings and spending, but raises questions over their long-term fiscal sustainability

Unlike its three predecessors, the Sixteenth Finance Commission has not published state-wise GSDP projections for 2026-31, citing the absence of revenue deficit grants

The CAG's review of state finances showed 18 states exceeded the 3 per cent fiscal deficit ceiling in FY25, while combined state liabilities continued to rise over the decade

A part of the normative allocation can also be based on fixed 'performance criteria'

The 16th Finance Commission shifts focus away from demography, arguing ageing alone does not weaken state finances or justify higher transfers

The first of a two-part series explains how the Centre has adhered to a fiscal consolidation path and why it is imperative for states to align their fiscal trajectories too

The issue has drawn significant attention and public debate in recent times as states often announce a spate of freebies, particularly before Assembly elections

The Commission appreciates the Union government's fiscal restraint during the pandemic and the subsequent reduction in deficits and debt following the sharp spike seen in the pandemic year

Record Finance Commission grants promise greater fiscal autonomy for cities, but sharp cuts in central schemes shift the burden of urban transformation to states and municipalities

CAG Sanjay Murthy says improving local body accounts and standardising how states report fiscal transfers is essential as Finance Commission grants expand and accountability demands grow

In tandem, the Union Budget allocated ₹1 trillion to the Urban Challenge Fund, aimed at catalysing fund flows to urban local bodies (ULBs) over the next five years

The 16th Finance Commission throws up a transition challenge for states facing strict fiscal limits

As subsidies and cash transfers surge, the Supreme Court and Finance Commission warn that unchecked freebies risk straining state finances and long-term growth

More than three weeks after the 16th FC's recommendations became public, the southern states are no longer complaining about an unfair deal in the way central taxes are distributed among them