The most inherent feature of all well established federation is assumed to be the chronic gap between own resources and expenditure potentials of the states. Such a situation arises because the states have dynamic and expanding functions but they are deprived of productive and elastic resources of revenue, which are handled by the federal government. In India, a provision has been made in the constitution for setting up of quiquennium Finance Commissions so as to suggest the amount of resources, under different heads, which should be transferred from the union to the states. The states feel...