Finance Commission: Fiscal Equity

A Quasi-Judicial Body (Art 280) for center-state tax devolution.

1. Core Mandate

• Vertical Devolution: % share of taxes given to states.
• Horizontal Devolution: formula-based distribution among states (Population, Area, Forest, Fiscal effort).
• Grants-in-Aid: for local bodies and disaster relief.

2. Recent (16th FC)

• Tasked with recommending the devolution path for 2026-2031.

3. Conclusion

Success lies in moving from "Centralization" to "Equity-Saturated & Devolution-Verified Fiscal Saturation."