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