Paper I · 6 Indian Economy & Planning · 6.3.1 Public finance

6.3.1.10 Fiscal federalism: Finance Commissions, the divisible pool and state borrowing

The Constitution gives the Centre the richer taxes and the States the larger spending duties, and the Finance Commission, appointed every five years, closes that gap by sharing taxes and giving grants.

  • APPSC Paper I · Paper I
  • Advanced level
  • 7 min read
  • Full course

Key terms

  • Finance Commission
  • Article 280
  • divisible pool
  • vertical imbalance
  • horizontal imbalance
  • grants-in-aid
  • Article 275
  • Article 282
  • state borrowing
  • Article 293
  • FRBM states
  • State Finance Commission

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. AP angleStandard
  5. Mains writingMains writing
  6. Common trapsFoundation
  7. Quick revisionFoundation

Read the full note in the app. It is part of the APPSC Paper I full course in Medha AI. Free in the app: the first chapter of each topic.

Read the full note in the app Indian Economy & Planning questions with answers

All Public finance notes · APPSC Paper I syllabus · APPSC Paper I Mock 1 with answers · Start free

Medha AI writes its own notes and checks them against the sources listed. Medha AI is an independent preparation service. It is not affiliated with, endorsed by or connected to APPSC, TSPSC, MPSC, UPSC or any other commission or government body.