States Advocate for Equal Tax Revenue Share: Plea to Finance Commission

The call for a more equitable distribution of tax revenue between India's central government and states is intensifying. The 16th Finance Commission, led by Arvind Panagariya, finds itself at the center of this discussion, with a significant majority of states advocating for an increase in their tax revenue share from the current 41% to an equal 50%.

During a press conference in Uttar Pradesh, Panagariya detailed the push from over 22 states seeking a revised share. However, he did not disclose whether this demand will be part of the commission's recommendations to the President. Historically, Finance Commission suggestions have been endorsed as proposed, adding weight to this potential shift.

Formed under Article 280 of the Constitution, the commission has until October 2025 to deliver its report, which will guide fiscal allocations for the period starting April 2026 through March 2031. As discussions continue, the anticipation surrounding their recommendations is mounting.

(With inputs from agencies.)