The 16th Finance Commission (FC) begins its work at a defining moment for India’s federal compact. The economy now stands at roughly $4 trillion, with states accounting for over 55% of total public expenditure, up sharply from less than half a decade ago. India’s fiscal structure has shifted-the Union remains the architect of macro strategy, but states are now the primary executors of growth.

The FC’s role extends far beyond fiscal arithmetic. It must strike a constitutional balance between equity and efficiency, growth and justice, redistribution, and performance. With India targeting a $10-trillion GDP within the decade, the principles of devolution must evolve to serve the India of today.

The 15th FC’s tenure coincided with a period of intense flux-pandemic shocks, global inflation,

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