Economic decentralization

♤ 14th Finance Commission recommendations to increase tax receipt devolution to state from 32% to 42% gave a massive boost to financial autonomy to the states.

♤ Union Government had also raised the non-statutory share from 21% to 26% and about 57.6% of the gross tax receipts were to be transferred to the states.

♤ States are encouraged to participate in economic diplomacy. For eg- Tripura & Punjab were allowed to sell surplus electricity to Bangladesh & Pakistan respectively.

♤ Implementation of Goods and Services tax, as a universal code for indirect taxes, has also boosted fiscal federalism.