India has a large vertical fiscal gap, which has been increasing. The reason is that while the Constitution assigns the most buoyant taxation powers to the Union, it allocates more spending responsibilities to the states.
South India's situation is unlike any in large federal unions across the world. US, UK, China, Germany, and Spain correct their fiscal imbalances through tax policy. India is making it worse.
Initial talks held on the possibility of India entering the programme that was started in 2017 between France, Germany and Spain to ensure European sovereignty in defence and security.
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