Centre-State Disputes over Financial Resources

In April 2024, states like Tamil Nadu, Kerala, and Karnataka moved the Supreme Court against the Centre over delays in disaster relief funds, borrowing limits, and drought relief.

Fiscal Federalism in India

Defines funding & administrative responsibilities across Union, States, & Local bodies.

• Key principles:
  • Fiscal Equivalency: Public service jurisdiction should match its beneficiaries.
  • Decentralization Theorem: Localized service provision for efficiency.
  • Principle of Subsidiarity: Lower-level governments should handle functions first.

Constitutional Provisions

• Seventh Schedule (Article 246): Tax division between Union & States.
• Revenue Sharing:
  • Article 269: Centre levies but assigns tax revenue to states.
  • Article 269-A: GST distribution between Centre & States via GST Council.
  • Article 270: Centre ....