Central transfers — arresting the decline in shares of some States
The HinduThere are many issues that the Sixteenth Finance Commission will have to deal with. In Table 1, the shares of groups of States and those for selected States are shown, for the Twelfth Finance Commission to the Fifteenth Finance Commission. Between these two Finance Commissions, the loss to the southern States due to the distance criterion amounted to 8.055% points, although the overall loss was much less at 3.985% points, implying that there was a gain under other criteria. While accepting the recommendation of the Fourteenth Finance Commission to raise the share of all States to 42% from 32%, the Centre increased the cesses and surcharges, thereby reducing the size of the divisible pool. After the recommendation of the Fourteenth Finance Commission, the share of the States in the combined revenue receipts increased from 63.9% to 68.1%.
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Data | How States’ share in Centre’s taxes declined due to cesses, explained in 5 charts
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