16वें वित्त आयोग की शर्तें संदर्भ पूर्ववर्ती वित्त आयोगों से कैसे भिन्न हैं? साथ ही, उन कारकों की जांच करें जो वित्त आयोग के शर्तों को पूर्व करने के बावजूद राज्यों में आर्थिक विषमताओं को बढ़ा रहे हैं। (250 शब्द, 15 अंक) In what ways are the Terms of Reference for the Sixteenth Finance Commission different from the earlier Finance Commissions? Also, examine the factors that perpet economic disparities across states, despite the Finance Commission's evolution becoming increasingly progressive.

Difference in Terms of Reference of 16th Finance commission:

eg: local self-govt, state lists, with (16T) transfer of GST to the municipalities.

eg: Uttar Pradesh (grant => ₹1 contribution => ₹0.3, Tamil Nadu (grant => ₹1 contribution => ₹1.73)

Factors for Increasing Economic Disparities among states:

eg: Finance commission grants => Northern states (migration) => Southern states

eg: Uttar Pradesh (grant => ₹1 contribution => ₹0.3, Tamil Nadu (grant => ₹1 contribution => ₹1.73)

eg: Uttar Pradesh (Disbalance in revenue generation), Kerala (Industrial district)

eg: Devolution increased from 31/10 (14 MFC) but impacted by literacy rates, female empowerment etc.

eg: increase in share of assets and switchages (not shareable with states) => differential rates of interest

Way Forward:

Therefore, Finance commission is said to be the balancing wheel of fiscal federalism, at the vertical level and horizontal level.