Examining the Balance in ‘Fiscal Injustice’ Discourse: CNN Central News & Network-ITDC News Bangalore/Delhi, India
Karnataka Congress Member of Parliament, D K Suresh, commented on the budgetary allocations announced by the finance minister on February 1, suggesting that southern states were experiencing fiscal injustice. He expressed concern that this disparity might lead to the division of South India into a separate nation. It is essential to scrutinize the underlying biases in this assertion and swiftly dismiss the notion.
Suresh stated, “The Centre is not adequately distributing the GST and direct taxes to South Indian states, resulting in injustice for the region. Funds collected from southern states are being disproportionately allocated to North Indian states. If this trend persists, we may be compelled to advocate for a separate nation.” He emphasized the seriousness of the situation by emphasizing that failure to address this perceived injustice promptly could necessitate the proposal for Southern secession in the future.
On the surface, the disparity in central tax allocations between the single North Indian state of Uttar Pradesh (UP) and the collective five southern states (Andhra Pradesh, Tamil Nadu, Karnataka, Telangana, and Kerala) is apparent. UP has received nearly 18% compared to the 15.5% collectively received by the southern states. Despite UP’s higher gross allocation at Rs 1.83 trillion, the southern zone outperforms in various aspects such as investments, job creation, infrastructure, social security, welfare schemes, governance, and population control.
This leads to a narrative that the southern states contribute significantly to the tax pool but receive comparatively less in return. Such discourse supports the argument that the advanced southern states subsidize the less developed northern states, potentially rewarding and incentivizing poor governance and population control practices. This narrative challenges the cooperative model that binds India together as a union of states.
However, it’s crucial to recognize that the sharing of the tax pool is rooted in the principle of lifting poorer states to the level of more efficient and wealthier ones, aiming for equalization. Fiscal transfers play a pivotal role in achieving this goal. The question arises whether DK Suresh Kumar would extend the same argument to his own state. Would he consider metropolitan areas like Bengaluru city, contributing more to the tax kitty, as victims of “fiscal injustice” when funds are directed towards less developed rural areas?
