The Seen and the Unseen - hosted by Amit Varma cover image

Ep 320: South India Would Like to Have a Word

The Seen and the Unseen - hosted by Amit Varma

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Challenges with State Taxation and Central Transfers in Telangana

Telangana faces a significant challenge with its state tax revenue being only 7.7% of its GSDP for 2021, while central transfers accounted for only 2.5% of GSDP. This small share of central transfers forces the state to tax its citizens at the state level, leading to the need for double taxation. In contrast, Bihar received 31% of its GSDP as central transfers for the same period. This substantial disparity highlights the significant burden faced by Telangana in meeting its budgetary requirements. The state's heavy reliance on its own people for tax revenue poses a significant challenge to achieving financial autonomy.

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