States’ Demand for Increased Financial Autonomy
States in India are increasingly asserting their need for greater financial autonomy. This refers to the freedom to independently mobilize, allocate, and spend resources without excessive central intervention. Enhanced financial powers are seen as essential to address diverse regional priorities effectively.
Recent Developments
- States like Kerala, Tamil Nadu, Punjab, and Telangana have recently voiced concerns over borrowing restrictions, GST compensation delays, and shrinking shares in central tax revenue.
- Many states have demanded enhancement of their share from the existing 41 per cent to 50 per cent from the central divisible pool.
Background
- Historically, India's federal structure has granted the Centre significant ....
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