3. Transfer of Resources from Center to States

In the federal system of India, state and local bodies depend a lot on Center for meeting their financial requirements. There exist several mechanisms to channel resources from Center to states, such as:

♤ Finance Commission to lay down principles which shall govern division of sharable pool of taxes of Union of India.

♤ Goods and Services Tax Council make the recommendation on rate of the GST, surcharges, Exemptions, Model of GST law, Place of Supply rules, and special rate of the GST, Special Provision for North east states or any other matter as decided by the council.

♤ Grants-in-Aid under Article 275 of the Constitution of India.

♤ Discretionary grants under Article 282.