Finance Commission and the Southern States: Overview of Issues

This paper examines some of the relevant issues of resource sharing in the Indian federation, particularly in the context of the on-going deliberations of the 13th Finance Commission. While the focus is on the southern states, in matters of fiscal transfers, a segmented view cannot be taken as the design of transfers has to take into account competing claims of different states on a limited pool of sharable resources. The main transfer–related issues discussed here relate to the vertical and horizontal dimensions of fiscal transfers.