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Now, with this transfer of earmarking and financing of funds for sectors, it is the states’ money that is being used to finance the Centre’s expenditure. To its credit score, by retaining the present share of states in taxes, the XVFC has been principled and pragmatic. It has accomplished so despite critical prodding by the Centre to revise it downwards.

So far, the Centre has been used to pre-empting resources from the kitty to be distributed among the states but only to finance expenditures in …