Population as a Criterion for Horizontal Devolution by the 14th Finance Commission

Complying with their terms of reference, the last seven finance commissions have used the 1971
population as a parameter for determining the shares of states. However, the ToR of the 14th FC permits it to additionally consider demographic changes since 1971. This article argues that this incremental change does not provide adequate cause for the 14th FC to depart from the path of its predecessors.

V Bhaskar (mrvbhaskar@gmail.com) and P S Subrahmanyam (psvs2001@gmail.com) are officials in the finance department of the Government of Andhra Pradesh.

The authors are grateful to B P R Vithal, C S Rao and G R Reddy for insightful comments. They also thank participants of the programme on “Financial Management in Government” held at the Administrative College of India, Hyderabad in May 2013 for their comments on a preliminary version of this article. The usual disclaimers apply.