New Delhi, March 26 -- The Finance Commission is a key pillar of India's federal fiscal architecture. A constitutional body appointed every five years, it is expected to arbitrate impartially between the central and state governments and among the latter themselves in allocating tax revenues collected by the Central government on behalf of all administrations.

Though FCs are not widely known, their awards have far reaching implications for fiscal federalism and macroeconomic fiscal outcomes. Successive finance commissions (FCs) have established a sound tradition of impartial awards.

Slight shifts in one direction or another notwithstanding, most earlier FCs have tried to navigate a balanced course between interests of the central govern...