Lok Sabha Question No. 3441 (UNSTARRED), answered on 2016-08-05
Subject: Revenue Transfer to States
Ministry: FINANCE
Asked by: VINCENT H PALA, KIRTI (JHA) AZAD, NINONG ERING, GAJENDRA SINGH SHEKHAWAT, PARBHUBHAI NAGARBHAI VASAVA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 3441

## TO BE ANSWERED ON FRIDAY 5 th  August, 2016 [14 Shravana, 1938 (SAKA)]

'Revenue Transfer to States'

No. 3441,  SHRI VINCENT H. PALA:

SHRI KIRTI AZAD:

SHRI NINOG ERING:

SHRI GAJENDRA SINGH SHEKHAWAT:

SHRI PARBHUBHAI NAGARBHAI VASAVA:

Will the MINISTER OF FINANCE be pleased to state:

- (a) the detail of the gross tax and non-tax revenue collected by the Government and transfer to States during the last three years and the current year, State-wise;
- (b) the ratio thereof in percentage of Gross Domestic Product (GDP) and gross revenue collection of Governments during the said period;
- (c) whether the Government has received any complaints/representations form States about unequal distribution of their shares; and
- (d) if so, the details thereof along with the response of the Government thereon?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

- (a) (i) Details of Gross Tax and Non-Tax Revenue from 2013-14 to 2016-17 are as under:

( ` Crore)

| Year                     |   2013-14 (Actual) |   2014-15 (Actual) |     2015-16 (RE) |    2016-17 (BE ) |
|--------------------------|--------------------|--------------------|------------------|------------------|
| Gross Tax Collection     |        1.13873e+06 |        1.24488e+06 |      1.45961e+06 |      1.63089e+06 |
| Non-Tax Revenue          |   198870           |   197857           | 258576           | 322921           |
| Gross Revenue Collection |        1.3376e+06  |        1.44274e+06 |      1.71819e+06 |      1.95381e+06 |

(ii)  Details  of  Share  of  net  proceeds  of  Central  Taxes  and  Duties  transferred  to  States  are  as under:

( ` Crore)

|   2013-14 (Actual) |   2014-15 (Actual) |   2015-16 (Actual) |   2016-17 (BE) |   2016-17 (Upto August, 2016) |
|--------------------|--------------------|--------------------|----------------|-------------------------------|
|             318230 |             337808 |             506193 |         570337 |                        203688 |

State-wise details are enclosed as Annexure 'A'.

- (b) Share of net proceeds of Central Taxes and Duties transferred to States as percentage of Gross Domestic Product (GDP) and Gross Revenue collection are as under:

( ` Crore)

| Year                                                                                         | 2013-14 (Actual)   | 2014-15 (Actual)   | 2015-16 (Actual)   | 2016-17 (BE )   |
|----------------------------------------------------------------------------------------------|--------------------|--------------------|--------------------|-----------------|
| Share of Central Taxes & Duties released to States as percentage of Gross Revenue Collection | 23.79%             | 23.41%             | 29.46%             | 29.19%          |
| Share of Central Taxes & Duties released to States as percentage of Gross Domestic Product   | 2.80%              | 2.67%              | 3.73%              | 3.79%           |

- (c) Assam, Bihar, Tamil Nadu & Uttarakhand  have represented about unequal distribution of shares
- & in  Tax  devolution.  The  Fourteenth  Finance  Commission  (FFC)  while  determining  the  inter-se
- (d) share of the States, aimed to correct the differentials in revenue raising capacity and expenditure needs, taking into account the cost disability factors to the extent possible. The Commission had the view that the devolution formula should continue to be defined in such a way that it attempts to mitigate the impact of the differences in fiscal capacity and cost disability among States. While doing  so,  Commission  had  kept  in  view  the  approaches  suggested  by  individual  States  for horizontal  distribution.  Accordingly,  Commission  had  decided  following  criteria  and  weights assigned for inter-se determination of the Shares of taxes for the States:-

| Criteria           |   Weight (Per Cent) |
|--------------------|---------------------|
| Population         |                17.5 |
| Demographic Change |                10   |
| Income Distance    |                50   |
| Area               |                15   |
| Forest Cover       |                 7.5 |

The FFC recommended enhancement in the share of the States in the divisible pool of central taxes from 32% to 42%, which the Union Government accepted. This envisioned giving greater and real meaning to cooperative federalism and keeping in view the sentiments expressed by the States  regarding  greater  flexibility  and  autonomy  in  designing,  implementing  and  financing  of schemes.    This  would  in  absolute  terms,  more  than  compensate  the  fall  in  relative  shares  of certain states.  Hence in real terms, all states would stand to gain from the FFC recommendation.

*****

Annexure 'A' Statement showing year-wise releases of States' Share of Union Taxes and Duties made to the State Governments.

( ` Crore)

|        |                   | Actual    | Actual    | Actual    | BE        | 2016-17             |
|--------|-------------------|-----------|-----------|-----------|-----------|---------------------|
| Sl.No. | State             | 2013-14   | 2014-15   | 2015-16   | 2016-17   | (Upto August, 2016) |
| 1      | Andhra Pradesh    | 22131.88  | 13692.42  | 21893.79  | 24637.36  | 8798.91             |
| 2      | Arunachal Pradesh | 1045.85   | 1109.98   | 7075.58   | 7868.96   | 2810.33             |
| 3      | Assam             | 11574.52  | 12283.71  | 16784.88  | 18938.27  | 6763.56             |
| 4      | Bihar             | 34829.12  | 36963.07  | 48922.68  | 55233.71  | 19726.01            |
| 5      | Chhattisgarh      | 7880.22   | 8363.03   | 15716.47  | 17644.38  | 6301.48             |
| 6      | Goa               | 848.53    | 900.54    | 1923.76   | 2156.77   | 770.28              |
| 7      | Gujarat           | 9701.93   | 10296.35  | 15690.43  | 17669.03  | 6310.28             |
| 8      | Haryana           | 3343.24   | 3548.09   | 5496.22   | 6188.80   | 2210.29             |
| 9      | Himachal Pradesh  | 2491.52   | 2644.17   | 3611.17   | 4074.67   | 1455.21             |
| 10     | Jammu & Kashmir   | 4142.10   | 4477.23   | 7813.48   | 8892.09   | 3175.70             |
| 11     | Jharkhand         | 8939.32   | 9487.01   | 15968.75  | 17956.38  | 6412.82             |
| 12     | Karnataka         | 13808.28  | 14654.25  | 23983.34  | 26978.84  | 9635.13             |
| 13     | Kerala            | 7468.68   | 7926.29   | 12690.67  | 14282.00  | 5100.66             |
| 14     | Madhya Pradesh    | 22715.27  | 24106.99  | 38397.84  | 43211.39  | 15432.38            |
| 15     | Maharashtra       | 16586.70  | 17602.97  | 28105.95  | 31627.09  | 11295.24            |
| 16     | Manipur           | 1438.79   | 1526.95   | 3142.42   | 3524.42   | 1258.72             |
| 17     | Meghalaya         | 1301.96   | 1381.69   | 3276.46   | 3668.82   | 1310.27             |
| 18     | Mizoram           | 858.08    | 910.67    | 2348.11   | 2627.17   | 938.27              |
| 19     | Nagaland          | 1001.27   | 1062.69   | 2540.72   | 2844.82   | 1015.97             |
| 20     | Orissa            | 15247.09  | 16181.21  | 23573.75  | 26567.56  | 9488.24             |
| 21     | Punjab            | 4431.47   | 4702.97   | 8008.90   | 9005.09   | 3216.01             |
| 22     | Rajasthan         | 18673.07  | 19817.14  | 27915.93  | 31477.89  | 11241.94            |
| 23     | Sikkim            | 762.62    | 809.33    | 1870.28   | 2094.95   | 748.23              |
| 24     | Tamil Nadu        | 15852.76  | 16824.03  | 20353.86  | 23018.12  | 8220.57             |
| 25     | Telangana         |           | 9795.40   | 12350.72  | 13955.35  | 4983.97             |
| 26     | Tripura           | 1630.25   | 1730.13   | 3266.02   | 3667.01   | 1309.62             |
| 27     | Uttar Pradesh     | 62776.68  | 66622.91  | 90973.66  | 102649.92 | 36660.03            |
| 28     | Uttaranchal       | 3573.38   |           |           |           |                     |
| 29     | West Bengal       | 23175.02  | 24594.93  | 37163.93  | 41861.27  | 14950.24            |
|        |                   |           | 3792.30   | 5333.19   | 6014.46   | 2147.94             |
|        | TOTAL             | 318229.60 | 337808.45 | 506192.96 | 570336.59 | 203688.30           |