<h1>Tax devolution strategy must be nuanced to permit temporary borrowing and enable later fiscal consolidation amid revenue shocks.</h1> The Finance Commission and its Advisory Council discussed responses to pandemic-related revenue shocks, prioritizing mechanisms for tax devolution, intergovernmental transfers, and short-term financing of expenditures. The Council advised treating the base year and the first year differently, permitting temporary borrowings and targeted transfers to manage immediate fiscal strains, while aiming for fiscal consolidation subsequently. It expected an initial increase in general government debt-to-GDP because of revenue-expenditure imbalances, with a later reduction as growth and revenues recover.