- Statement a: "Since independence, the Centre has been gradually extending its functions in such a way that the states remain completely dependent upon it." This statement describes a common criticism leveled against the Indian fiscal federalism system. States often argue that the distribution of financial powers and the reliance on central grants make them overly dependent on the Centre, limiting their fiscal autonomy. While "completely dependent" might be an exaggeration, the trend of increasing centralisation of revenue sources and expenditure responsibilities is a point of conflict and debate regarding state fiscal autonomy. Therefore, the statement, describing a perspective within the conflict, is arguably "true" in the context of the question asking about the conflict. - Statement b: "The financial resources of the Centre are inelastic." This statement is factually incorrect. The financial resources of the Centre, such as corporate income tax, personal income tax, and customs duties, are generally considered to be elastic, meaning their revenue grows proportionally faster than the growth in national income (GDP). State resources, traditionally relying more on sales tax, state excise, etc., were often considered less elastic, although GST has changed the landscape. Therefore, stating that the Centre's resources are inelastic is untrue.