Earlier events that provide context for this topic.
15th Finance Commission recommends ₹1 lakh crore performance-based incentives for states
February 2021
The 15th Finance Commission's introduction of performance-based incentives marks a paradigm shift from traditional need-based transfers to outcome-oriented fiscal federalism. These incentives are linked to states' performance in areas like ease of doing business, power sector reforms, and sustainable development goals, reflecting the Commission's evolving role in promoting good governance and efficient resource utilization.
UPSC Angle: Expected questions on the rationale behind performance-based transfers, their impact on competitive federalism, and comparison with previous Finance Commission approaches to state incentivization
Climate change financing integrated into Finance Commission recommendations for first time
March 2024
The 15th Finance Commission's integration of climate change considerations into fiscal transfers represents a significant evolution in the Commission's mandate. By linking grants to climate adaptation and mitigation efforts, the Commission is pioneering outcome-based financing for environmental sustainability, setting precedents for future commissions in addressing global challenges through fiscal federalism.
UPSC Angle: Expected questions on the Finance Commission's role in climate financing, integration of environmental considerations in fiscal transfers, and the evolution of the Commission's mandate to address contemporary challenges