Why do we need a balanced fiscal federalism? Do you think the fiscal space of the states is weaning away at the hands of the Centre?

Answer: Fiscal federalism deals with the division of governmental functions and financial relations among levels of government. In India, fiscal federalism implies distribution of finances and financial powers (power to collect taxes) between the centre, states and local bodies.

Need of Fiscal Federalism

  • Regional and local differences can be taken into account by devolution of powers to federal units i.e. states. This takes care of micro level needs and realities.
  • Lower planning and administrative costs as the work is distributed at many levels.
  • Competition among local governments favours organizational and political innovations
  • More efficient politics as grassroots citizens ....
Do You Want to Read More?
Subscribe Now

To get access to detailed content

Already a Member? Login here


Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material before the last six months of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.

Related Content

General Studies Mains Questions And Answers