Twelfth Finance Commission and Local Bodies

The TFC has contributed significantly towards healthy fiscal federalism. But local bodies are yet to be put prominently on the public finance map of India. This is needed to facilitate an inclusive and equitable economic growth and to secure better horizontal equity. The available local data are of poor quality and need drastic improvement. Future finance commissions and their counterparts at the state level will have to play a more important role to make fiscal decentralisation a working reality in Indian fiscal federalism.