Why some States are upset with the Centre over revenue sharing: Part 1

| Video Credit:
The Hindu

Almost every State — including those ruled by the BJP — is calling for a change in the current revenue-sharing formula with the Central government.

To understand this growing demand, it’s crucial to first unpack how the Centre earns revenue, what constitutes the “divisible pool,” and why many States view the existing formula as inequitable — a concern that has only deepened in the post-pandemic years.

In the first part of this three-part series, The Hindu Data Team simplifies the complexities of fiscal federalism using a ₹100 note to illustrate how funds are shared.

The Fifteenth Finance Commission had recommended that 41% of the divisible pool be allocated to States. Now, the Sixteenth Finance Commission is visiting all States to determine the new revenue-sharing formula for the next five years.

This series delves into the roots of the Centre-State fiscal debate and explores the road ahead.

Presentation and scripting: Vignesh Radhakrishnan

Editing: Sambavi Parthasarathy

Camera: Thamodharan B.