We have, therefore, proposed a scheme of allocation of resources across States, that takes into account both their development needs as well as past performance, where the latter aims to incentivise better performance, and to allocate resources where they can be used most effectively. Specifically, our newly introduced parameter of 'demographic

DISTRIBUTION OF TOTAL RECEIPTS ACROSS DIFFERENT COMPONENTS (IN %) 2022-23 BE 2021-22 RE 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 0% 41 51 57 58 56 53 54 52 53 48 48 45 20% 40% 11 9 18 2 60% 14 12 13 10 1 2 41 80% 100% Tax Revenue Non Tax Revenue Recovery of Loans Other Receipts Borrowings and

The RBI’s report highlights three priorities for states:

1. Control Subsidies: States need to rethink their freebies and focus on sustainable spending.




2. Rationalize Expenditure: Invest more in future development rather than daily operations.




3. Improve Transparency: Standardized reporting and robust data systems are essential.