Finance Commission

Finance Commission	Article 280
	Building trust Cooperative and competitive Federalism Augmenting resources of local bodies Performance grant Various taxes Property tax Professional tax
FFC	Provision: vertical devolution: 42% of the divisible pool Horizontal sharing Pop. of 2011 Grant-in-aid revenue deficit DM local bodies No mentioning of special categories no sector specific grant  Recommended plan no plan division
Challenges of over powering states:	Lack of Expertise Financial,Technical,Planning,Implementing Poor political agenda Freebie politics Vote bank Pity issues Disputes With other states On issues like Water: eg. Satluj-Yamuna Trade Poor governance In handling issues: Reservation Ban culture Tinkering with Judiciary Other matters Disaster management  Corporate International disputes International agreements and matters of National importance Matters needing Uniformity through out India
Benefits of Decentralization or Giving more powers to States:	Competitive Federalism Control over finances Tailor made schemes Local problems and local solutions  eg. problem of Open defacation and education in Haryana and Solution via Local election conditionalities solution of Policy paralysis When not strong center, laws can be made by individual states eg. Rajasthan's Labor and Land laws

New Framework of Grants
Central Sector Scheme	Sub group of CM in Niti Aayog Core of Core (social protection and Inclusion, no change in Funding ) MGNREGA, NSAP. SC,ST, Women, minorities Core scheme 60 : 40 Optional Schemes (with flexibility of Spent) 50 : 50 Border area development and river conservation plan Criticism Does not linked with Outcome
FFC NK Singh Rationalization of CSS
Background	CSS are plan transfer to State gov on subjects in State and concur. Biggest component of CA to states Number of CSS very large: 360 at 9th 5 year plan Need: Fulfill national objectives Aid finances of State Inclusive growth Better implementation of schemes Steps for rationalization: Reduced CS from 66 to 28 Reduced rigidity with provision of flexi fund Evaluation of CSS by NITI Aayog, co terminus with FC Further Prospects Improving the process of transfer of funds Performance linked financing model Enables comprehensive development of sector.
Divisible Poll off Tax	42%
Doing away with Plan and Non plan	FFC
Restructuring and rationalising	Outcome based monitoring of  implementation of schemes

Grant-in-aid

Statutory General (states which need financial assistance) Specific like welfare of Tribes Article 275 On recommendation of FC Discretionary Article 282 No obligation to give grant