Center –state financial relation & Special Category status : Decoded
In any Federal structure, well defined financial relation between state and central is necessary for the smooth working of whole political system. As A democracy its also important for India. We had a beautiful and well defined system of the tax distribution between central and state But at the same time its a complex system. Here is small try to make it simple to understand. Generally the topic: “central state financial relation “come in limelight on the debate of the demand of “special category” status to some state. Debates in media mislead citizen on such important topic. Best way to understand the state-central relation is to understand the income and expenditure of State Govt and Central Govt. And the role played by various institution in this procedure. ( Check Flow chart). Special Category Status debate:- Debate and demand of the special status is purely politically motivated. Here is the example of it : Bihar governme...