Finance Commission and Centre-State Fiscal Relations: History, Recommendations and Implications

This is a historical background to the constitution of the Finance Commission that considers the composition of the commission, its terms of reference and, its approach. It analyses in particular the status of implementation of recommendations made by the Finance Commissions—from the First Finance Commission to the Thirteenth Finance Commission—with particular regard to the sharing of central taxes, grants-in-aid, debt position and relief measures, calamity relief, and grants to local bodies. It discusses the reports of the First Administrative Reforms Commission, R. S. Sarkaria Commission and M. M. Punchi Commission on centre-state relations. It covers centre-state relation in depth, taking up major themes in centre-state relations like how to redress the imbalances in the availability of resources between the centre and the states on the one and between the better-off and the poorer states on the other.