General Studies 2025 GS Paper II 15 marks 250 words Compulsory Examine

Q14

Examine the evolving pattern of Centre-State financial relations in the context of planned development in India. How far have the recent reforms impacted the fiscal federalism in India? (Answer in 250 words) 15

हिंदी में प्रश्न पढ़ें

भारत में नियोजित विकास के संदर्भ में केंद्र-राज्य वित्तीय संबंधों के विकसित होते स्वरूप (पैटर्न) का परीक्षण कीजिए। हाल के सुधारों ने भारत में राजकोषीय संघवाद को कितना प्रभावित किया है? (उत्तर 250 शब्दों में दीजिए)

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Directive word: Examine

This question asks you to examine. The directive word signals the depth of analysis expected, the structure of your answer, and the weight of evidence you must bring.

See our UPSC directive words guide for a full breakdown of how to respond to each command word.

How this answer will be evaluated

Approach

The directive 'examine' requires a critical investigation of Centre-State financial relations through historical evolution and recent reforms. Structure as: brief introduction tracing evolution from Planning Commission era to NITI Aayog; body analysing pre- and post-2014/2017 reforms (14th/15th Finance Commission, GST, cess/surcharge proliferation); conclusion assessing whether reforms strengthened or weakened fiscal federalism with balanced verdict.

Key points expected

  • Evolution from Plan grants to Finance Commission transfers and NITI Aayog's advisory role replacing Planning Commission's resource allocation
  • Impact of 14th and 15th Finance Commission recommendations on tax devolution (42% to 41%) and fiscal space of states
  • Analysis of GST regime: loss of revenue autonomy vs. GST compensation mechanism and its expiry in 2022
  • Proliferation of cess and surcharges (not shareable with states) and tied vs. untied grants affecting state flexibility
  • Cooperative vs. competitive federalism debate with reference to PM-KISAN, Jal Jeevan Mission and conditionalities
  • Critical assessment of whether recent reforms centralised or decentralised fiscal powers with evidence from state government representations

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Demand-directive understanding20%3Demonstrates clear grasp that 'examine' requires both descriptive tracing of evolution and critical evaluation of reform impacts; addresses both parts of the question (planned development context AND recent reforms) with proportional weightageAddresses both parts superficially or focuses heavily on one aspect; treats 'examine' as mere description without critical assessment of reform effectivenessMisinterprets directive as 'describe' or 'list'; omits either planned development context or recent reforms entirely; fails to provide evaluative element
Content depth & accuracy20%3Accurately cites specific Finance Commission periods, GST constitutional provisions (101st Amendment), precise tax devolution percentages, and distinguishes between statutory and non-statutory transfers with constitutional basis (Articles 270, 275, 282)General awareness of Finance Commissions and GST but with factual inaccuracies or vague references; conflates Planning Commission and Finance Commission rolesMajor factual errors (e.g., wrong constitutional articles, incorrect Finance Commission numbers, confusing GST with earlier VAT); superficial treatment limited to general federalism concepts
Structure & flow20%3Chronological progression from Planning era to present with clear thematic sub-sections; seamless transition between 'evolving pattern' and 'recent reforms' sections; logical cause-effect linkage between reforms and federalism outcomesBasic chronological structure but with abrupt transitions; some repetition between evolution and reforms sections; paragraphs lack clear topic sentencesDisorganised or haphazard arrangement; no clear separation between historical and contemporary analysis; abrupt ending without building toward conclusion
Examples / case-law / data20%3Uses specific data: 14th FC (42%), 15th FC (41%), GST compensation shortfall figures (₹1.1 lakh crore), cess/surcharge as % of gross tax revenue; cites state-specific instances (Kerala's borrowing limits controversy, Tamil Nadu's GST concerns) or Supreme Court observations on federalismMentions Finance Commission numbers without context; generic reference to GST problems; no specific state examples or quantitative backing for argumentsNo data, examples or case references; relies entirely on assertion; examples factually wrong or irrelevant to fiscal federalism
Conclusion & analytical edge20%3Balanced verdict recognising both centralising trends (GST, cess proliferation) and decentralising elements (higher tax devolution, NITI Aayog); suggests way forward (16th FC expectations, GST Council reform); demonstrates independent judgment on whether fiscal federalism improved or erodedSafe summary without clear position; generic recommendation for 'cooperative federalism'; fails to reconcile contradictory trends in reformsNo conclusion or abrupt ending; purely descriptive closing; extreme position (complete centralisation or perfect federalism) without nuance; irrelevant policy suggestions

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