Rajan's new index: How convenient

Given that the Finance Commission (FC) controls around 54 per cent of the Rs 6 lakh crore that is to be distributed from the Centre to the states this year, the UPA cannot show significant generosity to states in exchange for political support. The Centre can come out with a Bundelkhand package or give more grants to Naxal-affected areas, but there is no room for a sustained increase in transfers to specific states.

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