India, June 23 -- 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. These schemes have become a necessary, even if not sufficient, condition to win elections. This populist pivot has led to a situation where even some good performers on the SOTR-GSDP ratio front such as Maharashtra, have seen their fiscal health worsen. India's fiscal federalism narrative has generated a lot of rancour on the part of states from various angles. Richer states, most of which have also done well to contain their population growth have been complaining that the principle of taking more from richer states and giving to poorer ones penalizes them for their economic and demographic performance. The grievance is not exactly without merit, but it requires more nuance when read with the fact that states such as Tamil Nadu, have let their SOTR-GSDP ratio slide while making such complaints. On the other extreme are states such as Bihar, which seem to be losing a large amount of revenue because of policies such as prohibition. In the case of Bihar, such fiscal harakiri goes along with demands for special concessions from the Centre in addition to the already disproportionate equity driven tax devolution. Fiscal prudence, while absolutely necessary for sustainable economic growth for not just individual states but also the Indian economy as a whole, must always work on both sides of the equation. It is important that profligate spending is reduced butit is equally necessary to keep up on revenue mobilisation rather than treat it as a residual. Some of the poor performance could be tax-evasion, but some of it could be due to lack of sound taxation policies. The latter is an underrated opportunityfor cooperative federalism....