An autonomous research institute under the Ministry of Finance


Review of Fiscal Federalism in India

Publication date

Jan, 2009


Report submitted to the Center-State Relations Commission


M. Govinda Rao


The project involves preparing a survey article on fiscal federalism in India and identifying areas of reform. The study highlights the policy and institutional shortcomings in Indian fiscal federalism in terms of the assignment system and intergovernmental transfers. Focus areas include impediments to internal trade and allocative distortions, sources of tax and expenditure inefficiency and multiplicity of transferring agencies, poor structure of incentives, and inability of the transfer system to offset disabilities of poorer states.

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