Story in numbers: The politics of cess-surcharges needs to be tracked

Financial equity between the Centre and the states was a matter mooted by Modi when he was chief minister of Gujarat

In 2015, the 14th Finance Commission’s award represented a bonanza for the state governments. The report led Prime Minister Narendra Modi to make ‘’cooperative federalism’’ a plinth on which to rest centre-state financial relations: because the share of states in the divisible tax pool was raised from 32 to 42 per cent.

But simultaneously, another trend is visible. This is the tendency of the central government to levy cess and surcharges — two financial instruments that preclude sharing the proceeds of these two taxes with the state governments. As the data suggest, money raised from levying cess and surcharge has been