Compared with an average of 32% of gross tax collections, the BJP states all want this to be hiked to a uniform figure of 50%.
While some Congress-ruled states like Assam and Kerala have also asked the Finance Commission for a 50% share, states like Maharashtra and Karnataka have plumped for a more modest 40% share.
The 50% figure, mentioned by states to even the previous finance commission, is in all probability an aggregation of all transfers made from the Centre to the states, either by way of tax sharing or by way of grants and loans or assistance to central and centrally sponsored schemes.
According to the FY15 Budget, a total of Rs 7.8 lakh crore is to be transferred to states from the Centre, and this works out to 57% of the gross central taxes projected for the year.
Gujarats presentation to the Finance Commission is even more interesting since it was made by Narendra Modi, who was the states chief minister at that point in time. While asking for a 50% share in central taxes, Gujarat asked for all cesses and surcharges to be subsumed into this almost 8% of tax collections today come from cesses/surcharges that are not shared with the states. In addition, Gujarat has also asked for revenues from, say, spectrum sales Rs 27,000 crore in FY15 to be clubbed within the overall divisible pool. Were this to be done, the amount available for the Centre will diminish considerably.
While the last finance commission allocated just 17.5% of fund transfers on the basis of fiscal performance, Gujarat wanted less weight to be given to the poor fiscal position of states (30% vs 47.5% now) and more weight be given to their fiscal discipline (20% vs 0% now) and even a 5% weight to their share of all-India GDP (5% vs 0% now).