A Fair Plan Approach For Devolution Under The Twelfth Central Finance Commission: Some Suggestions

This study has made some suggestions for the consideration of the Twelfth Finance Commission. We have provided a conceptual framework comprising eight cardinal principles abbreviated as FAIR PLAN. We have also operationalised the framework and provided a computational algorithm for inter se distribution of the states share in central taxes. The devolution scheme has been illustrated using 4 states of Maharashtra, Tamil Nadu, Madhya Pradesh and Bihar as representatives of different income categories. The scheme of devolution suggested by us has been worked upon and laid out in a user friendly fashion so as to give complete flexibility for any one to modify the scheme at every stage.