Abstract:
Intergovernmental fiscal relations in India changed considerably following the implementation of the Fourteenth Finance Commission’s (FFC) recommendations and subsequent restructuring of grants by the Indian federal Union Government. The analysis for the policy brief quantifies the effect of enhanced devolution recommended by FFC, and grants’ restructuring by the Union Government on states’ fiscal space. It also examines the implications of these policy changes on expenditures of states, especially social sector expenditures.