Fiscal Federalism in India: An Analysis of Fiscal Transfers to States

Abstract

This article examines the dynamics of fiscal transfers in India, both statutory and non statutory. Constitution of India assigns responsibilities and revenue sources to Centre as well as States. Such division is said to be asymmetric as States are assigned greater responsibilities considering their revenue jurisdictions. Multiplicity of the channels of transfers and the lack of coordination amongst them has also been examined.

Keywords: Centre, State, Fiscal transfer, Fiscal federalism, taxes

JEL Classification: H77