The finance commission is a constitutional body created every five years to decide on Centre-state financial relations. The latest panel constituted for 2020-2025 was asked to use the 2011 population census for deciding every state’s share of the central taxes. This may mean that states with higher populations will receive more central funds.
The decision quickly turned into a political controversy because it meant that India’s southern states–Tamil Nadu, Karnataka, Andhra Pradesh, and Kerala–would see a fall in their share of central taxes. In these states,
