BJP-ruled states like Madhya Pradesh have asked the 14th Finance Commission for a uniform share of 50 per cent of Central tax collections.
Some Congress-ruled states, such as Assam and Kerala, have also made a similar demand. Interestingly, Gujarat had made a similar plea under then Chief Minister Narendra Modi. In addition to a 50 per cent share, it had also asked for revenues from the sale of natural resources, such as spectrum, to be shared. A change in revenue-sharing would have important consequences for the nature of federalism and governance in India, and these issues need careful consideration.
However, even if these demands are accepted, in whole or part, by the finance commission and the present government, there is nothing to prevent a future government from going back to the present system. A future finance commission may recommend a lower share of the revenue pie to states. Even if it does not, the Central government is not constitutionally bound to accept the recommendations of the finance commission in their entirety. The BJP’s election manifesto promised to “evolve a new model of national development, which is driven by states”. If the new government is serious about implementing this promise, it should consider structural reforms aimed at ensuring that state governments cannot be deprived of an increased share of revenues by any future ruling dispensation at the Centre.
