Why in news The Union Government is considering reducing the share of federal tax revenues that States receive. The proposal will be subm...
Why in news
The Union Government is considering reducing the share of federal tax revenues that States receive.
The proposal will be submitted to the Finance Commission, headed by economist Arvind Panagariya.
The Commission will submit its recommendations by October 31, to be implemented from fiscal year 2026-27.
The federal government wants to reduce the States' tax share from 41% to 40%.
The proposal is expected to be approved by the Cabinet, led by the Prime Minister, by the end of March. After that, it will be sent to the Finance Commission.
A 1% reduction in States' share could result in about ₹350 billion for the federal government, based on expected tax collections for the current year.
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