Latest news with #FinanceCommission
The Hindu
4 days ago
- Business
- The Hindu
A fair share: on divisible pool of tax collections
The Sixteenth Finance Commission (SFC), whose recommendations on financial devolution will be valid from April 1, 2026, faces a piquant situation. Its chairman Arvind Panagariya had noted last week that 22 out of 28 States, including many ruled by the Bharatiya Janata Party (BJP), had asked for a larger share of the divisible pool of tax collections, from 41% to 50% — a legitimate demand. The Union government has effectively shrunk the divisible pool by disproportionately increasing its revenue through non-shareable cesses and surcharges, whose share of the Centre's gross tax revenue soared from 12.8% between 2015-16 to 2019-20 (pre-pandemic years) to 18.5% between 2020-21 and 2023-24 (Budget expenditure). Thus, the effective share of States in the Centre's gross tax revenues averaged close to 31% in the 2020-21 to 2023-24 period — it was 35% in the previous corresponding period. Compounding this is the post-GST reality, where limited avenues for States to raise their revenue, make them critically dependent on central transfers. While GST collections have been fairly good in recent years, this has still not addressed the issue of the reduced avenues for States to increase their revenue. Further, the existing formula for horizontal devolution, with a heavy weightage given to population and income distance, is seen by economically progressive States (the South), as a penalty for performance and responsible governance. Keeping the status quo would go against the grain and the idea of cooperative federalism that the BJP-led government has emphasised. Mr. Panagariya also remarked that a sudden nine-point jump to 50% would '[upset] too many carts', indicating that the Centre would be loath to lessen its share because of rising expenditure on defence and other capital-intensive projects. This means that the Finance Commission would be less inclined to engage with States' demands, also explaining why it might keep the devolution share unchanged at 41%. Yet, doing so would be a missed opportunity to forge a new federal compact. A modest increase in the vertical devolution, meeting States' demands half-way, would be a welcome signal. The Finance Commission must also recommend a mechanism that will rein in the arbitrary use of cesses and surcharges, maybe even capping them at a fixed percentage of the gross tax revenue of the Centre and including any surplus collection in the divisible pool, as some have suggested. It must fine-tune the horizontal distribution criteria to create a more equitable balance between a State's needs, its area, and its performance. Crafting a formula that is fiscally prudent and one that strengthens the federal structure at its roots, the States, is imperative.
Hans India
7 days ago
- Sport
- Hans India
Commissioner with a cause
Karimnagar: It'sbeen only four months Huzurabad Municipal Commissioner Kemsarapu Sammaiah took charge and he's already made a mark in administration. With the constituency standing first in the State in March in property tax collection and qualifying for 15 Finance Commission funds, Sammaiah has now found the right blend of creating awareness through community involvement. While medical camps, blood donation camps, awareness on wet and dry garbage collection are moving forward; a plantation programme was started on the Telangana Formation Day with the goal of planting two lakh saplings this year. Sammaiah organised summer training camps with the help of donors without using government funds. Children in Huzurabad learnt and played kabaddi, chess, carroms, volleyball, basketball, hockey, and karate. Notably, a free summer sports training camp recently held at the Huzurabad Government High School ground received a good response from the children. Speaking to The Hans India, Samaiah said that summer training camps were organised with the help of donors to instil sports spirit in children and that many talented people from each ward will be honoured and this programme will continue in the future. MEO Srinivas, Kabaddi Association, Hockey Association, Basketball Association, Football Association, Gymnasium Teachers Association, Private Schools Association, Huzurabad dignitaries, municipal employees and staff worked hard to ensure that this camp received a good response. About 200 children registered their names in the sports training camp held from 6 am to 8 am with the help of coaches. The ground of the government high school in Huzurabad town, where the sports training camp was organised bustled with walkers as well as children. Moreover, parents expressed joy saying that if such sports training camps are organised by the government and voluntary organisations everywhere, the children will develop friendship, leadership qualities with high values. Many donors in the town are providing bananas and eggs as breakfast to the children every day for the good work undertaken by the municipality for the development of sports. Children who learn karate from black belt karate master Bhusarapu Bapurao in the sports camp every day Children also thought of giving breakfast to other children, as per the instructions of karate master Baburao, each of them collected Rs 100 from their pocket money and provided bananas to about 150 people as breakfast. 'By involving people in various social programmes and achieving best results as well as promoting democracy and it will inspire people. Recently, Manasa was appointed as a junior civil judge in Siddhartha Nagar; Dasari Sarala, a government employee, rendered excellent service in various departments; and Banda Sampath Reddy was promoted in the police department; and former councilor Swaroopa Mutyam Rao were honoured,' he said.
News18
13-06-2025
- Business
- News18
'Get 15 Paise For Every Rupee Contributed': Karnataka Asks Finance Commission For 'Fair Tax Devolution'
Last Updated: The state has also sought support of Rs 1.15 lakh crore investment to bolster Bengaluru's infrastructure and address regional disparities in Kalyana Karnataka and Malnad Karnataka chief minister Siddaramaiah on Friday demanded a more equitable and growth-oriented fiscal federal structure before the 16th Finance Commission, led by chairman Arvind Panagariya. Siddaramaiah highlighted the stark imbalance in fiscal returns despite Karnataka's significant contribution to the national economy. In an additional memorandum submitted to the commission, Karnataka articulated its vision for reforms aimed at creating a predictable and fair devolution system. 'Karnataka's fiscal strength fuels national growth. It is time to ensure that growth is not penalised but rewarded. We urge the commission to adopt a balanced, forward-looking approach to devolution," the chief minister stated to the media after the meeting. Siddaramaiah underscored the state's share, with Karnataka contributing nearly 8.7% of India's GDP with just 5% of the population and ranking second in GST collections. Despite this, Karnataka receives a mere 15 paise for every rupee contributed to union taxes, a figure drastically impacted by the reduction in its share from 4.713% to 3.647% under the 15th Finance Commission, leading to a cumulative loss of over Rs 80,000 crore. What Karnataka wants Karnataka has sought increased vertical devolution. It has asked to increase the states' share of taxes to at least 50% and cap cesses and surcharges at 5%, along with including union non-tax revenues in the divisible pool. It is also urging a more balanced horizontal devolution. The CM proposed that states retain 60% of their contributions, with 40% directed to less-developed states to balance growth and equity. He suggested a reduction in the weight of the income-distance criterion and greater emphasis on a state's economic contribution to avoid penalising high-performing states. Siddaramaiah advocated for critical reforms to Revenue Deficit Grants and State-Specific Grants, noting that Karnataka's per capita devolution significantly dropped between the 14th and 15th Finance Commissions. Focus Bengaluru The state has sought support of Rs 1.15 lakh crore investment to bolster Bengaluru's infrastructure and address regional disparities in Kalyana Karnataka and Malnad. Siddaramaiah has earlier launched campaigns like 'Our Tax, Our Right" to seek the state's rightful share in the devolution process. First Published: June 14, 2025, 02:39 IST
The Hindu
12-06-2025
- Business
- The Hindu
Karnataka to seek increase in devolution funds under 16th Finance Commission
To recover losses from reduced devolution to Karnataka under the 15th Finance Commission, the Karnataka government has proposed to seek additional grants under the 16th Finance Commission during a meeting in Delhi on Friday. Chief Minister Siddaramaiah, who also holds the Finance portfolio, and his economic adviser and MLA Basavaraj Rayaraddi, and senior officials would participate in the meeting and hold discussions with Arvind Panagariya, chairman, 16th Finance Commission. The 16th Finance Commission has already held one round of talks with the Karnataka government. Decreased devolution Karnataka, which has been complaining about discrimination in the devolution of funds by the NDA government, is expected to demand the increase in the devolution from 3.64% to 5% in the 16th Finance Commission. The 15th Finance Commission, in its award period (2020-21 to 2025-26), had dragged Karnataka's share (horizontal devolution) down from 4.71% in the 14th FC to 3.64%. Owing to this, according to sources in the State Secretariat, the State is likely to lose ₹62,098 crore during the 15th Finance Commission period. Karnataka gets back only 0.29 paisa for one rupee it contributes to the Central pool of taxes, while Bihar gets back ₹7.06 and Uttar Pradesh gets back ₹2.73. This has been flagged by the government several times. Cess and surcharges Currently, the Centre does not share cess and surcharges collected from States. Karnataka has been requesting the Centre to bring cess and surcharges colleges from States under the divisible pool. The Centre has been collecting about ₹5 lakh crore annually in the form of taxes from the State, but receiving about ₹55,000 crore, including grants from the Centre. The Finance Commission's award period would commence from April 1, 2026.
India Gazette
08-06-2025
- Business
- India Gazette
"Double engine govt is working towards making farmer's future beautiful and secure": UP CM Yogi Adityanath
Auraiya (Uttar Pradesh) [India], June 8 (ANI): Uttar Pradesh Chief Minister Yogi Adityanath on Sunday highlighted that the 'double engine' government is working towards making the future of its farmers beautiful and secure in the state. Uttar Pradesh Chief Minister Yogi Adityanath, while addressing the Kisan Samman Samaroh, said that after the NDA government came to power in 2014, farmers became one of the 'agendas' for this government. The Uttar Pradesh government pointed out that 12 crore farmers in the country are getting the benefit of the Prime Minister's Kisan Samman Nidhi Scheme. 'You must have seen for the first time in 2014 that the farmer who provides food can also become a part of the political agenda of a government. When PM Modi started the Soil Health Card Scheme... After the Soil Health Card, the Prime Minister's Agricultural Irrigation Scheme and then the Prime Minister's Agricultural Insurance Scheme were implemented and the Prime Minister's Kisan Samman Nidhi Scheme was implemented,' he said. '12 crore farmers in the country are getting the benefit of the Prime Minister's Kisan Samman Nidhi Scheme... This double engine government is also working towards making the future of its farmers beautiful and secure in the state.' CM Yogi highlighted. Further stressing on the BJP government's efforts to mitigate farmer suicide in the state, CM Yogi said, 'When our government came in 2017, farmers were committing suicide... There were no facilities anywhere. In 2017, when we came, first of all we took forward the loan waiver program of Rs 36000 crore of 86 lakh farmers and after the loan waiver, we resorted to the Prime Minister's Agricultural Irrigation Scheme to develop the irrigation capacity in the state ...' Earlier, Uttar Pradesh Chief Minister Yogi Adityanath conducted a high-level review of the State Tax Department in Lucknow and directed the officials to adopt the policy of transparency, technical efficiency and strict enforcement in tax collection. CM Yogi directed to take action against shell companies and fake registered companies. CM Yogi Adityanath met with members of the 16th Finance Commission in Lucknow on Wednesday. The state's Finance Minister, Suresh Khanna, said earlier that CM Yogi laid out several demands in front of the Finance Commission. This also included a demand to increase the state's share in central taxes. Khanna earlier told ANI, '...Some demands were made by the Chief Minister for the state today (Wednesday). Instead of the 41 per cent share we received so far, we should get 50 per cent. At the same time, Uttar Pradesh should not get less than 20 per cent in central taxes. This is our demand.' 'At the 16th Finance Commission meeting, the Uttar Pradesh government presented the achievements of 8 years. Based on the successes, it seemed clear that the Finance Commission was satisfied with our progress, and Uttar Pradesh will get a good recommendation and will take a long leap forward successfully...,' the deputy CM remarked. (ANI)
