<h1>Fiscal incentives for states proposed to align transfers with performance, population control and local governance needs.</h1> Experts advised the Finance Commission on designing fiscal incentives tied to State performance, addressing regional inequality, and reforming intergovernmental transfers. Discussion focused on financing for democratic decentralization and urban local bodies, improving local revenue collection and land management, and using updated population data for allocations while incentivising population control. Modalities of Centrally Sponsored Schemes, revenue deficit grants, and specific purpose grants were reviewed to align transfers with equity and performance.