The book under review gives Man account of how iria federal country taxes are collected and distributed by and amongst the states and the Centre' the various methods of doing that and the' relative merits and demerits of these' methods. So the book serves avery good purpose of educating those who are uninitiated in that subject The author, S Gurumurthy's background of having worked in previous finance commissions and having dealt with them as a state government official has helped him in collecting material which he now successfully formalied in this book. So, for the sake of getting informed about the various nuances, of the subject one can very usefully read this book.
The book is divided into three parts namely, tax assignment (i.e. who will impose and collect the tax) between the Centre and the states in a federal state and the vertical and horizontal tax sharing between them. Expenditure assignment and tole of grants are two more subjects covered in the subsequent chapters. While discussing the subject, Gurumurthy quotes
from the experiences in other countries with some references about India.
A good part of the book has been devoted to the discussion about which tax should better be collected by the Centre and which by the states. Tax collection by the Centre and distribution to the states has been
referred to as downward transfer.
Conversely, collection bv the states and sharing it the Centre is called upward transfer the author points out the relative, and demerits of both
the systems and has come to the inevitable conclusion that a combination ofthe two systems is the best. But the question still remans As to which taxes should be transferred downwards and which ones upwards. The author has not concentrated as much on the theoretical and practical aspects as to what is the position in other countries. He has chosen Hungary to discuss downward transfer. How Hungary isthe only example and the most crucial one to Muminate the subject i
