ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Foreign Policy-Strictly Bipartisan

every other state became entitled to a share of excise duties on the score of backwardness. In a minute of dissent. Raj Krishna, one of the members of the Seventh Finance Commission, has suggested an alternative formula for distribution of the states' tax share among the states which, according to him, would have given additional revenues of Rs 2,100 crores to eight poor states and another eight hill states and also brought down the ratio of maximum (Haryana) and minimum (Orissa) per capita surplus on revenue account to 6:1, compared to 45:1 under the majority recommendation. With regard to the additional duties of excise in lieu of sales tax leviable on sugar, textiles and tobacco, the formula used by the Seventh Finance Commission, however, appears to favour the developed states. The ratio of the receipt from these duties going to Maharashtra, for instance, goes up from 11.65 per cent (Sixth Finance Commission) to 17.08 (for sugar) and 13.506 (for textiles and tobacco). The shares of Punjab and Haryana also show a rise, while Bihar, Uttar Pradesh and Madhya Pradesh, among others, get a lower share. However, it may be mentioned that the total receipts from additional duties of excise in 1977-78 (revised) were Rs 325 crores compared to Rs 4,372 crores from Union excise duties.

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