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The prosperity paradox: Devolution conundrum for the finance commission

By: Joseph, K. J. and Kakarlapudi, Kiran Kumar.
Material type: materialTypeLabelBookPublisher: Economic & Political Weekly Description: 60(18), May 3, 2025: p.64-67. In: Economic & Political WeeklySummary: Two key issues of concern for the Sixteenth Finance Commission are highlighted. The declining progressivity in devolution is evidenced by the downward trend in the share of lower-income states in the divisible pool and the paradox of declining fiscal capacity of states with rising per capita income. The paper calls for adjustments in the weights of the income distance criterion and the population to ensure that the performers are not penalised while progressivity is ensured.- Reproduced https://www.epw.in/journal/2025/18/sixteenth-finance-commission/prosperity-paradox.html
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Articles Articles Indian Institute of Public Administration
60(18), May 3, 2025: p.64-67 Available AR136043

Two key issues of concern for the Sixteenth Finance Commission are highlighted. The declining progressivity in devolution is evidenced by the downward trend in the share of lower-income states in the divisible pool and the paradox of declining fiscal capacity of states with rising per capita income. The paper calls for adjustments in the weights of the income distance criterion and the population to ensure that the performers are not penalised while progressivity is ensured.- Reproduced

https://www.epw.in/journal/2025/18/sixteenth-finance-commission/prosperity-paradox.html

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