Anbumani Ramadoss calls for an increase in share of revenue allocated to States

PMK president Dr. Anbumani Ramadoss on Monday demanded that the share of revenue allocated to the States should be increased from 41% to 50%, underlining the decline in shares allocated over the decades.

In his letter to Dr. Arvind Panagariya, chairman, 16th Finance Commission, Dr. Anbumani said: “Despite contributing 10% of the total tax revenue to the Union government, Tamil Nadu receives a meagre 4.079% in return. As per State government statistics, the State gets only 29 paise for every rupee contributed, an unjustly low share.”

“The allocation for Tamil Nadu has been on a continuous decline since the second Finance Commission (1957). The State’s share dropped from 8.4% in the 1950s to 4.09% in the 15th Finance Commission. Over the last 30 years, this decline has resulted in a purported revenue loss of ₹3.57 lakh crore,” he added.

He further said that while Tamil Nadu is classified as a ‘developed state’ based on parameters devised by the Central government, the ground reality exposes stark gaps in education and health care. “For 2024-25, Tamil Nadu has allocated only ₹44,042 crore (1.39% of State GDP) to education and ₹21,198 crore (0.64%) to healthcare, well below the recommended benchmarks of 6% and 3%, respectively,” he said.

“The introduction of GST in 2017 limited States’ taxing rights over fuel and alcohol, reducing revenue-generating opportunities for State governments. At least 50% of the tax revenue generated by each State should be returned it, he said, adding that the Centre should refrain from levying cess, but if levied, the States should receive a share of the cess amount.

Published - November 19, 2024 12:15 am IST