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Risk to federalism

Finance Commission should not carve out a separate fund

In a recent decision by the Union Cabinet, the terms of reference of the Fifteenth Finance Commission were amended, so that the needs of defence and internal security be set aside from regular expenditure. In the course of extending the Commission’s term, the Cabinet added the following to its mandate: To “address serious concerns regarding allocation of adequate, secure and non-lapsable funds for defence and internal security of India”. This has correctly been seen as an attempt by the Centre to occupy more fiscal space. Article 280 of the Constitution requires the ...