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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).


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