Comments by "Raju" (@rajx7120) on "'India’s wicked resource allocation problem has an answer, break UP into smaller states'" video.

  1. It is unfair to blame UP. Punjab and Maharashtra get so much tax-funded subsidy for rice and sugarcane. That is unfair to UP farmers, whose free market price gets suppressed. And we know, UP is water-rich unlike Punjab and Vidarbha, and it is more economical to grow water-intensive crops in UP. And UP does produce more rice and sugarcane than Punjab and Maharashtra. Yet, UP farmers make less money, due to market distortion by subsidies. If Punjab/Maha changed to a less water-consuming crop, them UP farmers will get a better price. Incomes of rural UP, will improve and it's tax collections will also improve. Then this tax devolution problem will sort itself out.
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  2. ​​ thezoldics7648 Even if you split UP, there will be 80 seats, or even more, distributed across new states.
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  3. Punjab/Maharashtra get subsidies for growing water-guzzling rice and sugarcane. This distorts free market price for UP farmers, who produce more rice and sugarcane but earn less. If Punjab and Maharashtra reduced or stopped growing rice and sugarcane, and let free market adjust, then UP farmer's income will improve, and UP's consumption and GST will improve.
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  4. Punjab and Maharashtra get lot of subsidies for rice and sugarcane, with price guarantees. This affects free market prices for UP's farmers. So, UP getting more taxes is just a correction of that market distortion by govt intervention in farming. If Punjab and Maharashtra stopped growing rice and sugarcane, then UP farmers will get better prices in the market. Their incomes will improve, and UP's tax collection will improve.
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  5. What about subsidies given to rice and sugarcane farmers of Punjab and Maharashtra? This hurts market price for UP farmers, and hurts their incomes.
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