The report of the Fourteenth Finance Commission, chaired by Y.V. Reddy, was tabled in Parliament on February 24, 2015. The Finance Commission is a constitutional body that is formed once in five years, and provides recommendations on centre-state financial relations.

Recommendations of the 14thCommission include:  

Devolution of taxes to states: Tax devolution should be the primary source of transfer of funds to states. The share of taxes of the centre to states is recommended to be increased from 32% to 42%.

Additional budgetary needs of the states will be filled by grants-in-aid to the states. The total revenue deficit grant to states in the 2015-20 period is recommended to be Rs 1,94,821 crore.  

Weights of indicators for share in taxes: The weights of various indicators in the calculation of states’ share of taxes have been fixed at the following: (i) 1971 population: 17.5%, 2011 population: 10%, (ii) are