TFC has recommended specific grants amounting to Rs 10,171 crore to eight States1 for education and Rs 5,887 crore to seven States2 for health over its award period of 2005-10. The grants for both the sectors are an additionality over and above the normal expenditure to be incurred by the States in these sectors. Furthermore, it recommended specific grants to local bodies amounting Rs.
25,000 crore meant to improve basic amenities, viz., water supply, sanitation, solid waste management, etc. which are expected to improve the quality of life both in rural and urban areas. As regards States’ initiatives, many States have embarked upon the path of fiscal correction and consolidation in the recent period.