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Wednesday, April 14, 2021

South vs North Indian States – who gets more money? Whoever produces more Babies

Amid the fifteenth finance commission recent decision to put 15% weightage on the population criterion (2011 census) to divide the pool of money among states, Southern states argued that using the latest Census would penalize them for effective population control measures. Is there validity in the argument?

The Finance Commission is a constitutional body formed every five years to give suggestions on center-state financial relations.  Each Finance Commission is required to make recommendations on: (i) sharing of central taxes with states, (ii) distribution of central grants to states, (iii) measures to improve the finances of states to supplement the resources of panchayats and municipalities, and (iv) any other matter referred to it. 

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