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Fiscal Federalism Debate Over States’ Share in Taxes Why in the News ? The Union government accepted the Sixteenth Finance Commission (FC16) recommendation retaining States’ share at 41% of the divisible tax pool. However, concerns have emerged as the divisible pool’s share in total tax revenues has declined, raising debates about Centre–State fiscal relations and …
Read MoreFinance Commission Grants to Cities Remain Critically Limited Why in the News ? Debate has emerged over the 16th Finance Commission’s recommendations on urban local body (ULB) funding, as transfers to cities remain extremely low despite urban centres generating a large share of India’s GDP and government revenues, raising concerns about fiscal autonomy and federalism. …
Read MoreTax Devolution Retained at 41%, South Gains Why in the News? The Union government accepted the 16th Finance Commission’s recommendation to retain 41% tax devolution to States, while revising the horizontal distribution formula, resulting in a higher share for five southern States from 2026–27 onwards. This decision comes as the government also considers the implementation …
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