VISION: Journal of Indian Taxation
Year : 2018, Volume : 5, Issue : 2
First page : ( 28) Last page : ( 43)
Print ISSN : 2347-4475. Online ISSN : 2395-2571.
Article DOI : 10.17492/vision.v5i2.14520

Trends in Own Revenue of Indian States: Is Special Status Justified?

Murthy K. V. Bhanu

Professor, University School of Management and Entrepreneurship, Delhi Technological University, Delhi, India. E-mail: bhanumurthykv@yahoo.com

Online published on 9 April, 2019.

Abstract

The paper takes up a pertinent issue of Special status that has been granted to 11 states due to various reasons like backwardness and strategic location. Some of the research questions that the paper takes up are: (i) Do these states justify such status as per their performance in own revenue collection? (ii) Does the growth rate of own revenue Special States converge with that of Non-Special States? (iii) Should Special status continue? Using semi-log growth equations and a Convergence Index, the paper demonstrates that Special State revenue has grown at 17.73% per annum while that of non-Special States has grown at 14.37% and all States at 14.48% Annual Compound Growth Rate (ACGR). Hence, Special States’ growth story speaks of better performance over the period 1991–2017. They are converging, at a rate of 2.85% per annum, with non-Special States. All growth rates are highly significant which leaves no room for ambiguity about the broad conclusion that Special Status has proved to be justified. Some questions are raised by inter se comparisons between categories like Hill States, North-East States and so on.

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Keywords

Own revenue, State finance, Special status, Public finance, Centre-State relations.

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