Performance-Linked Fiscal Retention

State HDI Category	Central Tax Retention	Rationale
Top quartile (significantly above national average)	48%	Advanced states need less central support; higher retention funds own development
Second quartile	44%	Graduated intermediate incentive
Third quartile (at national average)	41%	Current baseline — no state loses from current position
Bottom quartile (significantly below national average)	35%	More central redistribution for developing states

Disaster override. NDMA disaster-declared states automatically receive top-quartile retention for 3 years regardless of HDI metrics. A Disaster Contingency Fund (2% of central tax collections annually) releases automatically to disaster-declared states within 6 hours by executive order, without parliamentary or Council of States approval for the initial 90-day period.