Mumbai, Delhi, Tamil Nadu and Gujarat are the four top states that account for 70 per cent of the total direct tax collections in the country. Even out of these four states, Mumbai alone contributes one-third of the entire collection. Imagine if the people of Mumbai demand that since Mumbai contributes more than even Maharashtra, it should be treated separately, and its money should be invested only in Mumbai? Or if the people of Bengaluru say that since the city contributes more in tax than the rest of Karnataka, it should be treated separately? I even wonder what if men of Karnataka protest against women of Karnataka getting free bus rides just because the men there pay more taxes than women.

The nation never thought of such things, but recently, the Congress government in Karnataka cooked up a new issue of the Centre discriminating with southern states while allocating money.

The tax devolution criteria work on the “rich states pay for poor states” principle. The devolution formula is based on six factors in which 45 per cent (the highest) weightage goes to income........

© News18