Sir, these new Unions of States created by the merger of Indian States have for a long time enjoyed a kind of right to tax the central sources of revenue, as income, excise and customs. Their financial system and their administrative structure have been developed on these sources of income. Now if all of a sudden, the central sphere is marked out, taken away and if the States are left with only the resources they can take along with other provinces, then the future of these States will be black indeed. For example, in the State from which I come, Travancore, forty per cent of the revenue is derived from the central sources of revenue. Immediately this Constitution comes into force, that source of revenue will be lost to this unit. The administrative system of this State was developed during the course of the last one century and more, and the administration itself was modelled with these resources at their command. Now unless some provision is made for a transitional period to develop other sources of revenue to meet the exigencies of their administration, the lot of these States will be hard indeed.
