Question

Fiscal federalism affects Kerala’s resource mobilization by:

• A. Giving the state complete autonomy on taxation
• B. Determining the state’s share of central taxes and grants, influencing financial resources availability
• C. Mandating state to borrow only from international institutions
• D. Prohibiting the state from collecting any taxes

Answer 1

Answer:

B. Determining the state’s share of central taxes and grants, influencing financial resources availability

• Fiscal federalism defines how central tax revenues and grants are shared with states like Kerala, impacting the overall financial resources accessible to the state government