<b>T N Ninan:</b> States are at the centre

State budgets, which once were smaller than the central budget, are now about a third bigger

Two fortuitous developments have saved Central budgets in recent years. One is the sharp drop in crude oil prices from the stratospheric levels they had reached in 2013-14. Sensibly, the government used this as an opportunity to virtually eliminate the massive subsidies on petroleum products, and to jack up taxes. The excise duty on petrol has been doubled, while that on diesel has gone up 140 per cent. These duties on petroleum products now account for over a half of all excise revenue, and explain the surge in excise collections this year, despite sluggish industrial growth. The second bonus of