The recommendations of the 15th Finance Commission have enabled the States to improve their fiscal conditions. Comment.

15th FC (chaired by NK Singh) gave some recommendations as per the form of reference. Art 280 - a PC by president every 5 years to prepare a strategy to deviate the funds between centre and its subsidiary units. Enabled state to improve fiscal conditions: (1) Increase in devolution - 41% suggested (although less than 45% of 14th FC, but 14th was demoted to UT. Thus increased devolution) (2) Performance based grant of funds to Power sector schemes, UJWALA scheme etc (3) Demographic & ecological performance - recognized - gave weightage of 12.5%, 10%. (4) Disaster mitigation fund DMF to augment NDRF & SDRF (5) Other grants - deficit grants etc

Challenges - criticism by states: (1) Lack of consultation - with states governance (2) No further increase - states envisaged already 45% (3) Most of the funds are tied - meaning with some conditions (4) Hill corridors 2011 census - southern states over unhappy as they performed better on democracy control (5) FRBM distribution to states - overall debt can be max 90% (while centre can have 40%) (6) Art 293(3) - restriction to borrowing from outside (FC recommended estimations) (7) Global budgetary borrowing + usd + surcharge share funds in Fiscal Federalism Thus further financial powers are needed to realize the principle of subsidiary.