Aizawl: Dr Arvind Panagariya, chairman of the 16th Finance Commission, addressed the media in Aizawl on Monday, stating that the commission is not yet certain about recommending the continuation of revenue deficit grants for states.
These grants, which help bridge the revenue gap post-devolution, have been part of previous Finance Commissions, but Panagariya noted that a final decision will be made only after the commission completes its visits to all states.
Ready for a challenge? Click here to take our quiz and show off your knowledge!
So far, the Finance Commission has visited 19 out of the 28 states, including Mizoram, to assess fiscal needs and fund allocations.
Panagariya mentioned that 16 of the visited states, including Mizoram, have proposed an increase in the state’s share of the divisible pool of funds, suggesting a rise from the current 41 percent to 50 percent.
In terms of horizontal devolution, Panagariya highlighted that some states have proposed adjustments to the criteria used by the 15th Finance Commission. Mizoram, during a meeting with Chief Minister Lalduhoma and state officials, put forward several proposals.
Ready for a challenge? Click here to take our quiz and show off your knowledge!
The state government suggested reducing the weightage given to income distance from 45 percent to 40 percent. Additionally, Mizoram proposed increasing the population-based share of state funds from 15 percent to 25 percent, while decreasing the share based on land area from 15 percent to 10 percent.
Furthermore, Mizoram recommended dropping two criteria—weightage for tax and fiscal efforts, and demographic performance (fertility rate)- from the allocation process. The state also proposed including new criteria, such as the achievement of Sustainable Development Goals (SDGs), which could account for 7.5 percent of the allocation, and an additional 7.5 percent based on the cost of essential commodities.
Panagariya emphasized that the final recommendations on these matters will be made after thorough evaluation of all states.