Background
Overview
This concept is fundamental to understanding the dynamics of Indian federalism, resource management, public finance, and the socio-economic development of mineral-rich regions. It frequently appears in GS2 (Polity & Governance) and GS3 (Economy, Environment) due to its implications for state autonomy, revenue generation, and sustainable development.
Fiscal federalism in India refers to the distribution of financial powers and responsibilities between the Union and State governments, including taxation, revenue sharing, and expenditure. The governance of mineral resources, a critical sector for economic development, often becomes a point of contention within this framework, particularly regarding the legislative competence to tax mineral rights and the allocation of mining revenues.