How is the 'vertical' and 'horizontal' devolution of taxes to the states decided? Highlighting the concerns raised by certain states regarding the devolution of taxes, suggest corrective measures.

Concerns raised by certain states:- (1). Direct tax distribution:- Greater allocation to under performing states due to 'income gap' outstretches. (2). More money to Bihar, Thanh and leg to TN and Kerala. (3). Earning of southern states diverted to northern states due to 'population' outweighs. (4). South has only 19% of population. (3). On indirect tax as GST devolution:- Loss for manufacturing states due to tax at point of sale. Delay in giving GST compensation to states. Greater devolution to more populous states.

Measures suggested:- (1). Enhance discretionary grant to states (art 275) which bear tax to poorer states under FC & GST council. (2). Change devolution criteria can give more weightage to population control and achievement. (3). Enhance participation of states in GST council for dialogue & understanding. (4). Timely devolution of entitled money ex Kerala complaned delays. Hence, by financial capacity we can pursue Bhartiya model of Development.