North-South tax debate turns political in India

The north-south dispute over federal funds stems from the lower share of taxes that are transferred by the central government to the less populous and fiscally stronger southern states. PHOTO: AFP
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BENGALURU – Southern states in India are clamouring for a larger share of common taxes distributed by the central government, with the dispute assuming political overtones as a battle between the north and south of the country.

In recent weeks, leaders from southern states have protested in New Delhi and issued full-page newspaper advertisements for a greater allocation of common taxes, which they say have shrunk under Prime Minister Narendra Modi’s government.

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