Explain the theory of fiscal federalism and discuss the inter-governmental transfers in India.

Fiscal federalism refers to the distribution of financial and taxing responsibilities between the central and sub-national levels of government. The theory of fiscal federalism recognizes the importance of coordination and cooperation between different levels of government in order to achieve optimal economic outcomes.

In India, the government has adopted a system of inter-governmental transfers to address the imbalances in the allocation of resources between the center and the states. The ___ ________ ____ ___ _______ ______ __________ ________.
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