Tax distribution and grants-in-aid reforms sought to guide intergovernmental fiscal allocations and local government funding.
The Commission seeks recommendations on distribution of net proceeds of divisible taxes between Union and States and allocation among States; principles and sums for grants-in-aid from the Consolidated Fund of India for purposes other than specified provisos; and measures to augment State Consolidated Funds to supplement Panchayats and Municipalities based on State Finance Commission recommendations, including review of financing arrangements for disaster management under the Disaster Management Act.