The Budget-I- Rich Gain at States Expense

Minister to underestimate the loss of revenue as a result of his so-called rationalisation of the income-tax structure is to play down the loss to the states of their share of the receipts from income-tax. That apart, even taking the Finance Minister's wholly unrealistic estimates of the loss of revenue from the reduction in income- tax rates, the pattern of the states being adversely affected by the Union government's fiscal policies continues in the Budget for the coining year. Thus the states share of the aggregate receipts from taxes levied by the Union government, which was 28.8 per cent in 1980-81, will come down to 24.4 per cent in 1984-85. Were the proportion of the receipts from Union taxes going to the states the same as it was in 1980-81, the states would have got over Rs 1,000 crore more by way of their share of the proceeds of these taxes in 1984-85. This is also some measure of how the Union government has passed on the burden of its financial crisis to the states.