UPSC Mains 2017 · GS II · Q11 · 15 marks · 250 words

Explain the salient features of the Constitution (One Hundred and First Amendment) Act, 2016. Do you think it is efficacious enough “to remove cascading effect of taxes and provide for common national market for goods and services”?

हिन्दी में

संविधान (एक सौ एक संशोधन) अधिनियम, 2016 के प्रमुख अभिलक्षणों को समझाइए। क्या आप समझते हैं कि यह ‘‘करों के सोपानिक प्रभाव को समाप्त करने में और माल तथा सेवाओं के लिए साझा राष्ट्रीय बाजार उपलब्ध कराने में’’ काफी प्रभावकारी है?

Centre-State RelationsConstitution and Basic Structure

How a topper answered the closest question

Toppers wrote this one in a test series: “Examine the evolution of fiscal federalism in India with reference to the 101st Constitutional Amendment Act.”

Vimal KumarAIR 107 · CSE 2025 · 201 wordsTheir whole copy

Opening

India is federal country (article 1) and federalism as basic structure of Constitution articulated in SR Bommai judgement 1994.

Article 268 to article 293 → deals with financial relation between Central and state government

Resource Collection and Redistribution a keystone to federal structure

Body

  1. Centralization of taxation power to Centre. via → more taxation subject in Union list (article 246) → more important subject e.g Corporate Income tax & Income Tax → Less imp to states. → (e.g) Land revenue.

  2. Issue of Cess & Surcharges → Does not go to Divisible pool of resources (article 271)

  3. Limit on states borrowing (article 293)

After 101st Constitutional amendment which brought GST → Goods and service tax → uniform taxation in Indirect taxes address in following ways :-

(1) Cooperative federalism use of GST Council (article 279A) for taxation decision making.

Voting share → State 2/3rd → Centre 1/3rd.

(2) GST Compensation to states ↳ Revenue loss to state.

(3) Increasing allocation of state share through Finance commission (article 280) ↳ 13th FC → Share of state 32% 14th FC → 42%.

(4) Reduction of CSS → Centrally sponsored scheme.

Close

Thus enactment of 101st CA led to fiscal federalism in the country.

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Source: UPSC, Civil Services (Main) Examination 2017, General Studies Paper II, Q11. The paper on upsc.gov.in. Themes and links to toppers’ answers are by UPSC Grade, not by UPSC.