Service standards in the provision of health and education in the states in India are low on average and also characterized by large inter-state disparities. These disparities are due to differences in fiscal capacity, differences in revenue effort and differences in priority accorded to the...

Two central problems in a fiscal transfer systemrelate to resolving vertical and horizontal imbalances. In the context of the setting of the 13th Finance Commission, this paper looks at the methodological background of fiscal transfers followed by recent Finance Commissions in India,...