Question

Nature scope and significance of international finance

Answer 1

Truly speaking, the fiscal arrangement of any country is largely governed by the political system of the country concerned.

India’s po­litical structure is federal; so its financial sys­tem is also federal in character.

The essence of the federal form of government is that each government (Central, Union Territories and State governments) and local-self government is independent of each other with constitution­ally demarcated functions. What is needed is that each government should have independ­ent sources of revenue and should have com­mand over resources to meet its needs.