Firozabad (UP)(PTI): In a fresh jolt to the BJP, Dr Mukesh Verma, MLA from Shikohabad Assembly constituency here, on Thursday resigned from the primary membership of the party alleging 'lack of respect' by the government towards backward classes and Dalits.

Verma is the seventh legislator, including two ministers, to have resigned from the BJP over the last three days.

Since the voices of the backward classes, Dalits, unemployed youth, traders of medium and small scale industries and shopkeepers among others are being ignored, I am resigning from the primary membership of the party, Verma stated in a letter to BJP state president Swatantra Dev Singh.

He said he will continue the 'fight for justice' under Other Backward Classes (OBC) leader Swami Prasad Maurya.

Maurya, after resigning from the Yogi Adityanath-led cabinet on Tuesday, had alleged "gross neglect" by the BJP towards Dalits, backward classes, farmers, unemployed youth and small traders.

Verma, also an OBC leader, also sent a copy of the letter to the party's national president JP Nadda. There are speculations that he will join the Samajwadi Party (SP).

In the recent past, Verma had met SP leaders amid rumours that the BJP would not field him in the upcoming polls.

Avtar Singh Bhadana, Brijesh Kumar Prajapati, Roshan Lal Varma, Bhagwati Sagar and Vinay Shakya are the five other leaders that quit the BJP in the last 36 hours.

Verma could not be contacted over phone.

 

Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.



New Delhi: The Union government is considering reducing the share of tax revenue allocated to states, sources familiar with the matter have said.

The proposal will be submitted to the constitutionally-appointed Finance Commission of India, which makes recommendations on tax sharing and other aspects of Union-state fiscal relations. The commission, headed by economist Arvind Panagariya, is expected to submit its recommendations by October 31, with implementation set for the 2026-27 fiscal year. The recommendations are binding.

According to one source, the Union government intends to lower the states' share of tax revenue from the current 41% to at least 40%. A cabinet decision on the proposal is expected by the end of March before being forwarded to the Finance Commission. A 1% reduction in states' share would give the Union government approximately ₹35,000 crore ($4.03 billion), based on current tax projections.

The Ministry of Finance and the Finance Commission have not yet responded to queries regarding the proposal.

The share of central taxes allocated to states has increased from 20% in 1980 to 41% at present. However, the Union government’s spending requirements, particularly during economic slowdowns, have led to calls for a reduced allocation to states. India's fiscal deficit is projected at 4.8% of GDP for 2024-25, while state deficits stand at 3.2% of GDP.

States account for over 60% of total government expenditure, primarily focusing on social infrastructure such as health and education. Meanwhile, the Union government allocates more resources to physical infrastructure. The introduction of the Goods and Services Tax (GST) in 2017 has limited states' ability to generate independent revenue. Additionally, since the COVID-19 pandemic, the Union government has increased the share of cesses and surcharges, taxes not shared with states, to over 15% of gross tax revenue, up from 9-12% earlier.

The Union government is also expected to propose measures to discourage states from offering cash handouts, debt waivers, and other welfare schemes often labeled as "freebies" for political gains. One possibility under consideration is linking Union grants to states' adherence to specific fiscal conditions.

Over the past five years, revenue-deficit grants to states have declined from ₹1.18 lakh crore ($13.61 billion) in 2021-22 to an estimated ₹13,700 crore ($1.58 billion) for 2025-26. It remains unclear whether grants will be denied to states that continue to offer such welfare schemes.