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Re: state/center division of powers, was:Shut down Excise
---Charu datt <charu@ix.netcom.com> wrote:
>
> prabhu.guptara@ny.ubs.com wrote:
>
> . . . let those who argue for greater decentralisation of the tax
structure be aware that:
>
> 1. they will thereby be weakening an already weakened centre, and
> 2. they will exacerbate existing income differentials between
regions/ localities (and that this will lead to greater desire for some
regions (very rich and very poor) to separate from India).
Iagree that 1. it not necessaroly a bad thing-IMO the center still has too
much power.
The states won't desire seperating from india if they have done badly due
to their own fault. Such a desire arises when they are poorer due to the
actions of those sitting in Delhi.
Regarding 2. I think we need to come up with some kind of guideline for
allocation of resources. Something like- each state must get back at least
X% of the tax revenue it generates in central spending averaged
Right now, 29% is ploughed back to the states (This rule came into force
during the UF regime).
-Arvind
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