Preliminary evidence on the impact of the recommendations of the Fourteenth Finance Commission suggests that there has been an increase in central transfers and social sector expenditures in a number of states in 2015–16. This evidence is biased upwards due to two factors. First, much of the gains have been measured with respect to a low base year. Second, the inferences are affected by systematic differences between actuals, revised estimates, and budget estimates. Using a modified base and comparable estimates for 15 major states, it is seen that these are much smaller. Besides, in most states, social services have received a lower priority over economic services in 2015–16.
