GSDP Share as a Criterion for Central–State Transfers: Rethinking Fiscal Federalism
The article examines whether Gross State Domestic Product (GSDP) share should be accorded higher weight in determining Central–State fiscal transfers. At present, tax devolution is guided by Finance Commission (FC) formulas that emphasise equity-oriented criteria such as income distance and population. However, States like Maharashtra, Karnataka, Tamil Nadu and Gujarat argue that they contribute disproportionately to central tax revenues but receive relatively lower transfers, e
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