Abstract:
This article discusses the objectives of the Finance Commission of India
since inception, within the ambit of critical issues in public finance.
Amidst increasing political tensions between the central and state
governments in India and waning trends in single party majority at the
Centre, the evolution of tax sharing arrangements are critical indicators of a functional federal structure. The article compares various
objectives put forth by the Finance Commission and evaluates observed
conditions in four important states in the country. We carefully evaluate
if the recommendations of the Finance Commission have influenced the
degree of industrialization in these states.
