ADDAI BIDDIKI, Santosh Ranganath Neelam


Among developing countries, India with a federal constitution is a case with relatively greater degree of fiscal federalism. However, in terms of delivering public services, mobilizing physical and human resources, harnessing the synergies and unleashing incentives to exploit the developmental potential, regional and local fiscal autonomy has worked with varying degrees of successes even within the country. In some states, fiscal federal system has been more successful than in others. The important reason for the examination of fiscal federalism in Indian context is the statutory recognition of the third tier of fiscal structure and evolution of formal three-tier federalism subsequent to the 73rd and 74th Constitutional amendment in 1992. The introduction of the third tier of fiscal authority has met with varying degree of successes in delivering public services in different States and it is important to examine extent of sub-State decentralization in different States. This paper is an attempt to provide a more complete picture of the fiscal federalism incorporating all the three tiers of government.


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