After reading this article you will learn about the financial relations between the Centre and the State of India:- 1. Divisions of Powers 2. Distribution of Resources 3. Grants-in Aid 4. Loans. Divisions of Powers: The constitution lucidly lists the powers and functions of different layers of government. The seventh schedule of Indian Constitution, on the basis of the financial [...]
After reading this article you will learn about the problems in financial relations between the Centre and State of India with suggestions for balanced fiscal federalism. 1. Mounting Vertical Imbalance: Vertical imbalance emerges because of disproportionate alignment of revenue sources in relation to increasing expenditure obligations by level of government. There is a situation of growing expenditure requirements and poor [...]
This article throws light upon the top five tools adopted for inter-governmental resource transfer. The tools are: Inter-Governmental Resource Transfer: Tool # 1. Tax Sharing: It is mode a in which a tax (or taxes) is levied by one agency and the proceeds distributed between different agencies. Generally the tax is collected by the central government and the proceeds are [...]