Table of Contents

APSC Answer Writing (Daily) based on Assam Tribune – 18/11/2025

For APSC CCE and other Assam Competitive examinations aspirants, practicing Daily Answer Writing is vital. This blog covers the most important Main question and its model Answer from the Assam Tribune today (18-11-2025).

Question (General Studies Paper-2: Polity & Governance)

“The increasing resort to cess and surcharges by the Union Government undermines the constitutional spirit of fiscal federalism enshrined in the recommendations of successive Finance Commissions.” Examine this statement in the context of Centre-State financial relations. Suggest measures to strengthen cooperative federalism in India’s fiscal architecture. (250 words / 15 marks)

📝 MODEL ANSWER (Exactly 250 words)

Introduction

The Finance Commission under Article 280 ensures equitable tax devolution between Centre and States. However, the Centre’s growing reliance on cess and surcharges—which bypass the divisible pool—has emerged as a critical challenge to fiscal federalism, undermining States’ fiscal autonomy.

Body

How Cess/Surcharge Undermines Federalism

Constitutional Bypass:

Under Article 270, only net proceeds of Union taxes (excluding cess/surcharge) form the ‘divisible pool’ shared with States
Cess as % of gross tax revenue: 10% (2011-12) → 18% (2024-25)
States lose ~₹2.5 lakh crore annually at 41% devolution rate

Operational Impact:

Fiscal Stress: Post-GST compensation end (2022), combined with cess erosion, States face severe resource crunch
Tied Grants: Cess funds return as Centrally Sponsored Schemes with matching contribution requirements
Developmental Gap: States like Assam (floods costing ₹5,000+ crore annually, border security) struggle with inadequate resources

Centre’s Justification:

Targeted funding for specific purposes (education, health, infrastructure)
Fiscal consolidation needs (debt 57% of GDP, defense expenditure)

Way Forward

Immediate Measures:

Cap cess at 10% of gross tax revenue through constitutional amendment
GST Council-type approval mechanism before levying new cess
16th Finance Commission (report submitted Nov 2025) should recommend compensation mechanism

Structural Reforms: 4. Increase devolution to 42-44% to cushion cess impact 5. Challenge-based grants for disaster-prone, border, post-conflict States 6. Revive Inter-State Council (Article 263) as permanent dispute resolution forum 7. Enable States to expand GST base (petroleum, electricity)

Conclusion

Fiscal federalism is a constitutional basic structure (SR Bommai judgment). The 16th Finance Commission must recalibrate this balance through principled reforms that respect federal mandates while enabling State capacity-building for inclusive development.isaster-prone regions of the Northeast.

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