Evolution of the system of resource transfers in the Indian and Canadian federal governance

Abstract

The analysis of the fiscal federalism in India suggests that the constitutional as well as institutional framework of it is well crafted as it provides tremendous amount of flexibilities to adjust itself to political and economic challenges. In view of the vast diversity that prevails in the country, there is a need for a strong Centre although the political realities have considerably changed and States are in a better position to tough bargaining with the Centre. The institutions of federal transfers, especially the Finance Commission is playing important role in managing fiscal distributions and fine balance among competitive state demands. newline