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flag Former RBI chief criticizes 16th Finance Commission’s shift from equity to efficiency, warning of regional imbalance and fiscal inequity.

flag Former RBI governor C. Rangarajan criticized the 16th Finance Commission for maintaining states’ share at 41% but failing to address rising cesses and surcharges, calling the proposed "grand bargain" inappropriate for the Commission’s role. flag He opposed the elimination of revenue deficit grants, arguing it undermines fiscal equity, and questioned the use of GDP-based formulas and population criteria. flag The Commission’s shift from equity to efficiency, including ending RDGs and linking transfers to economic performance, aims to promote fiscal discipline and reward growth, though critics warn of regional imbalance risks.

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