Mains Answer Writing - 3 Feb, 2026
GS3
Economy
10 marks
Explain the significance of the new horizontal devolution criteria introduced by the 16th Finance Commission.
How does the inclusion of “contribution to GDP” alter inter-state fiscal transfers?
Tips for your answer
- Define first, then differentiate: Start by defining horizontal devolution and clearly state that the 16th FC shifts it from being purely need-based to a need + performance-based framework.
- Highlight the GDP contribution logic in one line: Explain that adding “contribution to GDP” rewards economically productive states, incentivising growth, efficiency, and competitive federalism.
- Balance with a concern + conclusion phrase: Briefly note the risk of reduced equity for poorer states, then conclude with UPSC language:
- “The criteria seek to balance redistributive justice with economic efficiency.”
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