The Sixteenth Finance Commission worked amid rising strain on Centre–state relations and federal trust
Including GDP contribution in tax devolution raises shares for productive states like Karnataka and Gujarat
With GST curbing autonomy and central schemes dominating spending, protecting state revenues was crucial
While states’ share stays at 41%, extensive use of cesses keeps the divisible pool smaller than ideal
The Commission flags off-Budget borrowing, urging transparency and adherence to deficit limits
By backing productive states and fiscal probity, the report restores incentives for growth-led governance