Mains Answer Writing - 7 Feb, 2026

GS3

Economy

10 marks

The Sixteenth Finance Commission has introduced “Contribution to GDP” as a new criterion for horizontal devolution of taxes.
Explain the rationale behind this inclusion and discuss how the Commission attempted to balance efficiency with equity.

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Tips for your answer

Start with the rationale – mention the need to balance equity with efficiency in horizontal devolution.
Use keywords – write the phrase “equity–efficiency trade-off” and link GDP contribution to rewarding growth.
End with safeguard – mention square-root moderation of GSDP to prevent skewed transfers.

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