Transfer of Resources — Policy Reforms

Entry	Year	Description	Impact
80th Amendment Act	2000	This amendment gave retrospective effect to the recommendations of the 10th Finance Commission, which suggested a new scheme of devolution of Union taxes to states. It amended Article 270 to include all Union taxes and duties (except cesses and surcharges) in the divisible pool, thereby expanding the base for tax sharing with states.	Significantly increased the share of states in central taxes by broadening the divisible pool, moving towards a more comprehensive revenue sharing model rather than selective sharing of specific taxes. This enhanced fiscal autonomy for states.
101st Amendment Act	2016	This amendment introduced the Goods and Services Tax (GST) in India. It necessitated several changes to the constitutional provisions related to taxation and resource distribution, including the insertion of new Articles like 246A, 269A, and 279A (GST Council). It also modified Article 268, 269, and 270 to align with the new indirect tax regime.	Revolutionized India's indirect taxation system, impacting the divisible pool and the nature of tax devolution. While GST aimed to simplify taxes, it also led to the creation of a GST compensation mechanism for states to address potential revenue losses, fundamentally altering a significant component of resource transfers.