Tax origin not suitable measure for budgetary devolution to states: Study

Amongst the major states, an increase in the share of tax devolution over this period was observed in Chhattisgarh, Haryana, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, and West Bengal

Using the “origin of tax collection” as an indicator to decide the budgetary devolutions can further accentuate the already high levels of fiscal inequalities among the states, a recent study published in The India Forum journal says.

This comes at a time when southern states have raised concerns on the issue of devolution of resources from the Union government and demanded higher devolutions than what they receive currently as they contribute more to the national pool of taxes. 

“[The] Collection of taxes as an indicator of budgetary fund flow is not an appropriate measure for deciding on the quantum of devolution of