Archive · 27 May 2025
Tamil Nadu Seeks Greater Share of Federal Tax Revenue
During a meeting of Indian state leaders, Tamil Nadu's Chief Minister, M.K. Stalin, proposed that states receive more of the central government's tax money, suggesting a 50% share.
The article points out that the current sharing formula is 41%.
This idea comes from the need for more state funds, especially since the GST hasn't performed as well as expected.
While states are trying to raise their own taxes, the central government should seriously consider giving states more money.
Tamil Nadu CM Stalin proposed increasing states' share of central tax revenue to 50% during NITI Aayog meeting.
The current tax sharing formula is 41%.
States' combined tax revenues grew from 6.6% in 2017-18 to 7.2% in 2024-25.
GST has underperformed.
Meeting once a year is not enough for the Governing Council.
- Who
- M.K. Stalin, other Chief Ministers and Prime Minister Narendra Modi
- What
- Tamil Nadu proposed an increased share of central tax revenue for states.
- When
- Published May 27, 2025
- Where
- New Delhi (NITI Aayog meeting)
- Why
- To address states' financial needs and potential imbalances in revenue distribution.
States' Perspective
Central Government's Perspective
State vs. Central Tax Revenue
States' Perspective
States require a greater share of the central tax revenue.
Central Government's Perspective
States are working to improve their own tax revenues.
- Centre Tax Revenue Sharing
- Current Formula: 41%
- Tamil Nadu's Proposed Share
- 50%
- State Tax Revenue Growth
- States' combined tax revenues grew from 6.6% to 7.2% of GSDP (2017-18 to 2024-25)
- Event
- Chief Ministers at NITI Aayog meeting
