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For the first time in independent India's history the Centre has surrendered 10 per cent more of its tax revenue to states, an outcome of perhaps having a former Chief Minister as Prime Minister. Mr Modi has walked the talk on cooperative federalism. There is a bailout for cash-starved panchayats and municipal bodies. According to media reports, panchayats will get Rs 2 lakh crore between 2015 and 2020. It is not yet clear whether NITI Aayog will have lower amounts to share with states. The 14th Finance Commission has suggested that the states suffering revenue losses due to the GST (goods and service tax) should be compensated for three years after its rollout. It is thus a major shift in resource allocations. A strong Centre has nudged India towards greater federalism.
By: Vishal ProfileResourcesReport error
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