India, June 22 -- India's fiscal federalism framework works on a basic asymmetry. States spend more but the Centre raises more taxes. This asymmetry has worsened in the past decade.

A recently released report by the Comptroller and Auditor General (CAG) shows that 12 out of 18 major states in India have seen their State Own Tax Revenue (SOTR) to Gross State Domestic Product (GSDP) ratio fall between 2015-16 and 2024-25. An HT analysis of the report shows that not all of the fall can be attributed to states losing fiscal autonomy after the roll-out of the Goods and Services Tax (GST), although this may have played a role.

The worsening in revenue mobilisation has come at a time when states are also spending more money on populist schemes...