The Finance Minister, according to sources, made this suggestion at the National Development Council meeting, which was presided over by Prime Minister Manmohan Singh and attended by Chief Ministers here today.
Responding to Chief Ministers' contention that the Centre was collecting a lot of taxes from the petroleum sector, Mukherjee said that the states were bigger beneficiaries.
The Centre collects Rs 1.08 lakh crore as taxes from petroleum products, while the states collectively mop-up around Rs 72,000 crore annually, the Minister said, adding that one also needed to look at the amount which centre shares with the states.
After transferring Rs 24,000 crore as per the recommendations of the 13th Finance Commission, the Centre's portion will come down to Rs 87,000 crore, while that of states will go up to Rs 96,000 crore.
Meanwhile, taking a dig at the Opposition, a senior Cabinet Minister, who participated in the NDC meeting said that he would join the agitation if it could bring down prices.
The Cabinet Minister was responding to NDA-ruled Chief Ministers who said that people organised nation-wide bandh to register their protest against rising prices.
"Rising prices have made life very difficult for people across the country...The overwhelming response to the recent Bharat Bandh is a timely warning which cannot be ignored," Gujarat Chief Minister Narendra Modi said while speaking at the NDC.
The general inflation, which is in double digits for the fifth consecutive month, stood at 10.55 per cent June.