Journal of the Annamalai University. September 1953

The function of the Commission is to make recommendations to the President as to (a) the distribution between the Union and the States of the net proceeds of taxes which are to be divided between them and the allocation between the States of the respective share of the proceeds (b) the principles which should govern the grants-in-aid of the States from the Consolidated Fund of India (c) the cont [...] The Commission has been charged with the duty of making recommendations to the President on (1) distribution between the Union and the Part A States of the not proceeds of the taxes to be divided between them and the allocation among the States of the respective shares of such proceeds and (2) the principles which should govern the grants-in-aid to the States out of the Consolidated Fund of India. [...] The predominance of joint-stock enterprise in business the dispersion of the shareholders of companies all over the countryRECENT TRENDS IN FEDERAL FINANCE 21 and even outside the absence of authoritative information in income-tax records as to the area of residence of an assessee all this make the criterion of residence a difficult factor to apply in distributing the proceeds of the tax. [...] An indication of how deeply the States are dissatisfied with the Award can be had from the Memoranda submitted by them to the Sarkar Committee on the Financial Provisions of the Constitution in 1947 and from the representations which the States are now making to the Finance Commission The Sarkar Committee proceeded on the basis of collection population as well as of need and recommended that the [...] The recommendtions of the Finance Commission as to the share of the States in the net proceeds of taxes which are to be divided between the Centre and the States and the allocation between the States of their respective shares will remove the present state of uncertainty.