Power, infra, fertilsiers: How centre is incentivising states for reforms

Fund transfer linked to them meeting certain benchmarks in improving sectors

Co-operative federalism seems to be taking a new shape lately as the Narendra Modi government incentivises states to undertake specific reforms rather than do it itself.

While the central government earlier gave such tied funds to states and there are finance commissions' recommendations in this regard too, the process has accelerated under its second tenure.

It was during the coronavirus pandemic of 2020-21 that the government gave states flexibility to widen their fiscal deficit to five per cent of their gross domestic product (GSDP) from three per cent.

The move gave states extra resources of Rs 4.28 trillion and was partly linked to