India, Jan. 31 -- Fiscal year 2026-27 will mark the beginning of awards under the 16th Finance Commission (FC). The 16th FC's report will likely be tabled along with Sunday's Budget. FCs are constitutionally mandated bodies that define the revenue sharing between Centre and the states every five years. Fiscal federalism is a widely debated and often emotive issue in the larger political economy space in India. Opinions and takes are often strong, although not necessarily rooted in facts. Here is a brief summary of the larger environment which characterizes fiscal federalism in India.

This structural problem in India's fiscal federalism can only be overcome by first assuaging concerns rooted in demographic and linguistic fault lies which ...