Banking Term: Equalization Grant
Jagran Josh
Apr 24, 2015 14:30 IST
Banking Term: Equalization Grant
It refers to funds paid by central government to regional government out of general tax revenue so as to reduce disparities in income or tax rates that would ever otherwise arise from differences in taxable capacity among subordinate government
They are generally calculated based on the magnitude of the sub national "fiscal gap": essentially the difference between fiscal need and fiscal capacity.
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