Budget Byte: Will the states finally get their full share of tax revenue?

Topics Union Budget | states | Revenue

Dwindling share of states in taxes we pay

The recent years have been least rewarding to states in terms of their fair share in taxes collected by the Centre, as share of devolution in their total revenue fell from 30% in FY17 to 25% this year (Budgeted). Though the 14th Finance Commission raised the bar six years ago, FY21 has seen the lowest devolution since then, in April – November period. 

Some states get half their revenue from central taxes

Even though a quarter of states’ revenue comes through devolution, northeastern and weaker northern and eastern states such as Bihar, UP, and Jharkhand depend on it for more than 40% of their revenue. The report of 15th Finance Commission, which will be released along with the Budget, will pave way for tax revenue sharing in coming years. 

 



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