Fiscal Policy
It’s sad that India’s 16th Finance Commission award has given up a tradition of tax-sharing impartiality
The 16th Finance Commission’s report reveals a centrist bias in vertical tax devolution, its tax-sharing formula among states and its critique of freebies focused just on state-level handouts. Overall, India’s poorer states will lose out as efficiency gets the better of equity.
4 min read26 Mar 2026An American central bank that lacks operational autonomy could tip the US into a fiscal crisis
Washington’s fiscal path looks increasingly unsustainable, but investors have largely looked the other way. A reckoning may come if the Federal Reserve loses its independence—drawing bond market vigilantes back and pushing interest rates sharply higher.
3 min read15 Mar 2026US-Iran war oil shock unlikely to unsettle India’s inflation outlook
Economists say Indian consumers are unlikely to immediately feel the impact of soaring crude prices following the US-Israel-Iran war.
4 min read6 Mar 2026Are Indian states getting adequate fiscal support for the next five years?
The Finance Commission prescribed fewer grants this time, raising concern over whether states have enough support for the next half decade. However, states also receive non-statutory capital grants through the Centre’s special assistance scheme to fund essential public projects. Will this be enough?
4 min read5 Mar 2026New York under Mamdani is going welfarist in a big way but is the mayor playing with fiscal fire?
Free child care and other generous welfare measures promise many New Yorkers relief, but someone must pay the bill. As New York flirts with Europe-style benefits funded by taxing the rich, the risks of overdoing it in a relatively tax-resistant country mustn’t be ignored.
4 min read1 Mar 2026National Monetization Pipeline 2.0: The latest plan’s size is impressive but its success isn’t guaranteed
The Centre’s plan to monetize public assets by turning control over to private operators can unlock funds needed to accelerate India’s infrastructure build-up. But we must keep this process even-handed and well regulated. Airport privatization provides a cautionary tale on monopoly pricing power.
2 min read25 Feb 2026Why delinking the Finance Commission’s devolution from state FC reports is a flawed idea
The 16th Finance Commission argues that devolution can no longer realistically draw upon state finance commission reports as inputs. But while delinking the constitutional chain may seem practical, it’s not principled. Is this reform—or a retreat from fiscal federalism?
3 min read24 Feb 2026Why the Supreme Court's caution on freebies demands the attention of India’s political class
India’s apex court has done well to caution political parties against splurging on indiscriminate freebies. We can only guess what electoral gains such pre-poll declarations deliver, but they clearly strain public finances. Bad economics can eventually be bad politics too.
2 min read24 Feb 2026Thank the Finance Commission for a tax-sharing formula tilt that promotes better state-level fiscal policy
The 16th Finance Commission’s report makes a small but significant shift in how states should share India’s common tax pool. It tilts the formula of horizontal devolution towards growth and incentivizes better fiscal management by states.
2 min read3 Feb 2026Foreign outflows show currency concerns, not a negative India fundamentals: Aditya Birla Sun Life AMC's Harish Krishnan
With about 60% of top-tier companies' revenue linked to the dollar, a weaker rupee provides a natural hedge and a revenue boost, Harish Krishnan, chief investment officer - Equity at Aditya Birla Sun Life AMC, said.
10 min read3 Feb 2026