Implications of FCC Recommendations for Social Sector Spending Across States

The Fourteenth Finance Commission (FFC) set the stage for a radical overhaul of centre-state relations. Many actors, including state governments, have expressed concerns over the implication of these changes on the fiscal space available, state autonomy and social sector investments. We analyse budgets of 19 states and find that overall fiscal space for states has increased, as has social sector investment. We argue that this presents a need to significantly restructure Centrally Sponsored Schemes, improve the quality of budget data as well as an opportunity to ensure greater research and advocacy at the state level.