Why Centre is left with little fiscal cushion to deal with Covid pandemic

There are several well-known reasons for the fiscal mess that sits on the central government’s plate, but let’s start with one that is not often discussed: The greater share of revenue that has gone to states. Back in 2013-14, the states got 28 per cent of the Centre’s gross tax revenue. By 2017-18, this share had gone up to 35 per cent. Since then, the Centre has found various ways of clawing back some of the lost ground; last year, the states’ share was 31 per cent.   Central transfers as a share of the states’ own revenue have climbed from 45 per cent 20.....

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