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 ongoing 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 transferrelated issues discussed here relate to the vertical and horizontal dimensions of fiscal transfers.