3. Successive Finance Commissions have tried to balance the twin issues of fiscal discipline and regional disparities. Yet, they have been criticized by both the rich and poor states for neglecting their needs. Discuss. How far has the 14th Finance Commission been able to address this issue?

Approach:

♤ Briefly discuss the methodology of vertical and horizontal resource allocation used by Finance Commissions.

♤ Bring out the criticism by the states of the resource allocation.

♤ Mention the recommendations of the 14th Finance Commission in this regard.

♤ Discuss to what extent FC has been successful in addressing this issue.