The way in which the terms of reference of successive finance commissions have been framed, including that of the Thirteenth Finance Commission, has diluted the basic constitutional rationale of having such a statutory commission. Various deficiencies in the transfer system require correction not through a heavy reliance on tied and conditional grants (as we have seen in recent years), but with an alternative approach which accommodates and protects the objectives of equity, efficiency and autonomy of the recipient state governments.