Of the many issues that cause tension between the Centre and the States, taxes are a big one. The taxes we pay go to both the Centre and the States.
While the Centre gets to raise more taxes, it’s the States that end up needing to spend more. To minimise this imbalance, the Centre is supposed to give a sizeable chunk of its earning to the States.
But data shows that during the pandemic, while the Centre’s share in the divisible pools of taxes increased, the States’ decreased. The Centre managed to do this by increasing the cess and surcharges — the non-sharable part of the taxes collected.
Moreover, audits by the Comptroller and Auditor General show that the amount collected through cess was not used for the intended purposes and the Centre pocketed a sizeable portion of it.
Ideation and data support: Jasmin Nihalani and Vignesh Radhakrishnan
