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. 


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel