There has been an argument going around that Mumbai contributes 58,000 crores by way of taxes each year and we get nothing much in return. I agree with the spirit of the argument, but the figure seems to have come from adding up income and corporate taxes from Mumbai. If so, then it is inaccurate. A company might have its plants all over the country, but it will have its headquarters in Mumbai. The corporate income tax that it pays will be on the value added all over the country, but counted on Mumbai’s account. The right way to calculate the figure is to look at the value added by Mumbai and try to find out how much we are paying out of it by way of taxes. I am guessing this calculation is much more complicated. If only we replaced all taxes, including excise tax, octroi and income tax with a single VAT…. (Also read Nilu’s proposal that all taxes should go to the states and then they should contribute a fixed percent of them to the Centre. I agree with it)
I am sure that even there it will turn out that the city is shortchanged by a large margin, but it is important to point out this inaccuracy nonetheless before others do.