Call for more children reveals India’s north-south divide

DOES India, the world’s most populous country with an estimated population of 1.44 billion, really need more people? The question arose from the startling proposition of two regional leaders who recently called on their people to have more children. The two – MK Stalin of Tamil Nadu and Chandrababu Naidu of Andhra Pradesh – voiced the need for higher birth rates after a meeting of four southern finance ministers who complained about their share of tax revenue from Delhi.

Like nothing else, this outburst lays bare the strained relationship between the states and Delhi over the formula used to share the goods and services tax (GST) revenue as well as a looming redistribution of parliamentary seats.

Every five years, India sets up a Finance Commission to set out a formula for the sharing of taxes between the federal and state governments. GST revenue is shared based on three factors: each state’s needs, including population size, geographical size and forest cover; equity (per capita income difference among the states); and performance, which includes how much tax is raised by each state.