What does the reference to Finance Commission in section 7(4) imply?

It implies that on the basis of a reference by the central government through the President, the Finance Commission could sanction monies directly to states for the Act, which would be in addition to the sharing ratio of the centrally sponsored scheme operating the Act. It provides an additional window for central funds to be allocated to states that need them most. The 13th Finance Commission has since made allocations of Rs 24068 crore over a five year period specifically for elementary education. This will help States meet their 15% state share towards SSA – from the sliding scale of 65:35 in 2008-09 to 50:50 in 2011-12, but may be inadequate to meet the RtE requirements.