Finance Commissions: Perilous Proxies and Dangerous Dummies

Finance Commissions have progressively let sophisticated mathematical and statistical methods determine their recommendations. This approach was not free of deficiencies of varying kind and seriousness, but worse, it brought in its wake two elements inimical to the participative process of revenue sharing: obscurity, bordering on opacity, of the rationale of recommendations, and lack of accountability for their deficiencies. This critical review of past Commissions' work attempts to remind the new Commission of this reality and alert the state governments to it.