Finance Commission suggests higher share for states in central taxes
Moneylife Digital Team 24 February 2015

As per the increased devolution suggested by the 14th Finance Commission, states will get a share of Rs3.48 lakh crore in 2014-15 and Rs5.26 lakh crore in 2015-16 in central taxes

 

The Finance Commission has suggested raising share of states, including taxes and grants, in central taxes to 42% from current 32%. 
 
As per the increased devolution suggested in the report of the 14th Finance Commission, the states will get Rs3.48 lakh crore in 2014-15 and Rs5.26 lakh crore in 2015-16.
 
"The higher tax devolution will allow states greater autonomy in financing and designing of schemes as per their needs and requirements," the report tabled by Finance Minister Arun Jaitley in Parliament on Tuesday says.
 
The commission, headed by former Reserve Bank of India governor Y V Reddy, said the states should use this extra fiscal space for productive assets.  
 
The report, however, has a dissenting note from Abhijit Sen, a member of the now defunct Planning Commission. 
 
Comments
MG Warrier
9 years ago
The rise in the states' share of central taxes is indicative of Centre'sresolve to respect the rights of, and extend a helping hand to, states. This should be followed up with support to states to mobilise resources to meet internal needs.
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