New Delhi, April 28 -- At its core, India's Finance Commission (FC) is a constitutional mechanism for equalization, ensuring that differences in income across states do not translate into differences in access to basic public services.

But equalization is only as effective as the information it uses. When fiscal data is incomplete or opaque, the FC's recommendations-however well intentioned-risk misallocating resources, weakening incentives and undermining fiscal discipline.

Fiscal transparency is foundational to India's fiscal federal system. However, India's public financial management system continues to face persistent data gaps-misclassification of expenditure, incomplete reporting of liabilities, fragmented data across levels of g...