Sir, this article deals with the allocation of income-tax collected by the Central Government in the various provinces and it is said that “such percentage, as may be prescribed, ‘of the net proceeds in any financial year of any such tax, etc. etc. shall be distributed among those states in such manner as may be prescribed.” Now “prescribed” means, before the Financial Commission has been constituted, “prescribed by President by order and after the report also “prescribed by the Order of President, after considering the recommendations of the Commission.” Now I want to substitute this, that instead of ‘President by Order‘, we should substitute ‘Parliament by law‘. Sir, this is very important article by which Income-tax is to be distributed to the various states. Just now Mr. Barman moved his amendment that the percentage should be 60 per cent. and he suggested how it should be distributed. He suggested all the three methods according to which it should be distributed, some percentage to the provinces from which it was collected, again on population basis and so on. So this is a contentious subject and in fact if we study the report of the Expert Committee on the Financial Provisions of the Union Constitution which you appointed, you will find that they have given the history of the tax and have pointed out as follows :-
“On the question of apportionment of income-tax among Provinces also, the provinces differ widely in their views. Bombay and West Bengal support the basis of collection or residence, the United Provinces that of population and Bihar a combined basis of population and origin (place of accrual); Orissa and Assam want weightage for backwardness. East Punjab, while sugggesting no basis, rents her deficit of Rs. 3 crores somehow to be met.