The upcoming 16th Finance Commission has a highly critical task at hand

livemint.com:

GST launched in 2017—then its job is tougher still. Even so, the task before the 16th FC will be truly unenviable. This is because a Lok Sabha constituency rejig may overlap with its span of coverage from 2026-27 to 2031-32.

In accordance with a Vajpayee government decision of 2001, a long-overdue delimitation exercise is to be undertaken following the “first Census after 2026." Covid got in the way of the 2021 headcount, but this one delayed further or even the next due in 2031 could trigger—and form the basis of—a re-allocation of Lok Sabha seats among states. This is unlikely to go down smoothly, as differing rates of population growth would amplify the share of northern states in Parliament. While the underlying rationale is sound, as we must reduce if we can’t eliminate today’s inequity in representation, wherein each Member from a populous state represents many more voters than an MP from elsewhere, our southern and western states that stand to lose share of voice at the national level would be far from amused.

As they have done far better on population stability, diminished political heft at the Centre would seem like unjust desserts. What makes this situation particularly piquant is that the demographic success of these states has been accompanied by faster economic expansion and thus a rising relative contribution to the country’s coffers. Although taxation is meant to play equalizer, how mop-ups are split could prove contentious in the context of these trends.

Over the years, successive FCs have tried to bring about some convergence in standards of living across states through a variety of transfers. As pointed out by former Reserve Bank of India governor, D. Subbarao in a recent newspaper op-ed, “For every