Why the South keeps pulling ahead: Growth, demographics and development

Beyond the increasing complaints about their falling share of central tax revenues, the experience of southern states holds a lesson for the poorer regions wishing to bridge the gap

Kerala’s Finance Minister K N Balagopal recently argued that successive Finance Commissions have chipped away at the state’s share of central tax devolution and grants, a complaint echoed across southern states. The headline figures lend weight to that grievance: The combined share of the five southern states in the total central tax pool — or devolution — slipped from 19 per cent in financial year 2010-11 (FY11) to 16 per cent in FY26; Kerala’s share fell from 2.4 per cent to 1.9 per cent over this period. 

To be sure, the total pool of devolution itself came down in proportion