⚖️ 16th Finance Commission shakes up Centre-State finance
The 16th Finance Commission's report sparks major debate on fiscal federalism in India. It was presented by the commission concerning the 2026–31 period, affecting Centre-State financial relations. Vertical tax devolution is set at 41%, while grants-in-aid are dramatically halved to 8.3%. Critics argue this burdens vulnerable states by removing need-based grants and emphasizing GDP contribution. The way forward suggests re-institutionalizing targeted equalization grants for disadvantaged regions. ⚖️