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Fiscal Federalism
Fiscal federalism describes how revenue-raising powers and spending responsibilities are divided between central and state governments, and how money flows between them through tax sharing, grants and co-funded schemes.
Why It Matters
Many public services you use, from schools to hospitals, depend on how this sharing works.
In India
The 2025 rural employment law changed funding from fully central to a 60:40 split, shifting part of the cost to states.
See it in the news
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