States fear losing revenue once agriculture market reforms kick in

The first of a two-part series looks at why states such as Punjab, which depend on taxes levied on mandi transactions, are disgruntled

As the Central government team was putting the finishing touches to legislation empowering farmers to sell their produce outside the designated mandis, someone had a last minute thought.
 
Given a revenue-starved government, why not levy a 1 per cent cess on all such non-mandi transactions? 
 
The idea, according to senior officials, was junked to avoid confusion on who should levy the cess, collect it, and distribute between the Centre and state and in what proportion.
 
There was also a fear that the famed ‘Inspector-Raj’, which the legislation sought to dismantle, might surge back once such a cess