"The overarching framework for India's fiscal policy is provided by the constitution."Amplify.

Model Answer:
The overarching framework for India’s fiscal policy is provided by the constitution and the framework is made of:

• Article 246
• Article 248 (residuary power of taxation) and Seventh Schedule
• Article 280 provision for Finance Commission
• Article 112 and other articles related to Budget
• Part IX and IX-A (local administration)
• Article 360 (Financial Emergency)

Article 246 and Seventh Schedule clearly divide the powers of taxation between Central and the State governments. Article 248 makes provision for enabling parliament to exercise residual power of taxation when a particular subject of taxation is not available in any of the Union, State or Concurrent list of the constitution. Further, there are provisions for financial powers of local administration in part IX and IXA.
Since the tax powers of states is not equal to the centre, the constitution makes provision for a finance commission via article 280 which recommends allocation of some resources of centre to states via statutory grants and discretionary grants. The constitution also mandates the central government to prepare budget or annual financial statement of its proposed taxation and expenditure for Legislative debate and approval in the parliament under article 112.