Tax origin is not an appropriate measure for fiscal decentralization to states: study

Using the “origin of tax collection” as an indicator to decide on fiscal decentralizations could further accentuate the already high levels of fiscal inequality among states, according to a recent study published in the journal The India Forum.

This comes at a time when the southern states have raised concerns over the issue of decentralization of resources from the Union government and are demanding higher devolutions than what they are currently receiving as they contribute more to national taxes.

“(The) collection of taxes as an indicator of budget flow is not an appropriate measure to decide on the extent of decentralization of

First print: June 7, 2024 | 8:15 PM IST