16th Finance Commission arrives in state today, Uttar Pradesh to pitch for larger share of tax pie

Hindustan Times

2 days ago

As the 16th Finance Commission begins its visit to the state from Ayodhya on Tuesday, the Uttar Pradesh government's team is working almost round the clock to make a case for a greater share in the 'divisible pool of states' that came down marginally following the 15th Finance Commission's recommendations.
The divisible pool refers to the portion of the central government's gross tax revenue that is allocated to states.
Though Uttar Pradesh got the largest share among the states, its share in the divisible pool came down marginally from 17.959% to 17.931% (for 2021-2026) as the 15th Finance Commission recommended the share of states to be 41% (against 42% by the 14th Finance Commission) with an adjustment of 1% made to provide for the then newly formed Union Territories of Jammu and Kashmir and Ladakh from resources of the Centre.
The 16th Finance Commission led by its chairman Arvind Panagariya will arrive in the state capital on Tuesday evening after visiting Ayodhya earlier in the day.
Senior officers are busy giving final touches to the state government's demands to be made to the finance panel for a greater share in central funds.
Chief minister Yogi Adityanath on Monday reviewed the presentation to be made by the state government before the finance panel.
'Yes, the state government will demand a greater share in the divisive pool of states with special consideration for Uttar Pradesh for additional funds. Uttar Pradesh is leading on the path of development as our focus has been on bringing about improvement in the law-and-order situation and boosting development. We are working to achieve objectives of zero poverty and make UP a trillion-dollar economy,' minister for finance Suresh Khanna said.
Those aware of the development said the state government would demand that the Finance Commission should give greater weight to the population.
The state government would make a detailed presentation about the efforts being made by it to mobilise additional resources and improve forest cover.
'We hope the 16th Finance Commission will recommend a greater share to the states and give special consideration to Uttar Pradesh in giving additional funds,' a senior officer of the state government said on condition of anonymity.
The 15th Finance Commission introduced demographic performance of states in the need-based six-point criteria recommended for horizontal devolution. The commission gave 15% weight to population, 15% to area, 10% to forest and ecology, 45% to income distance, 12.5% to demographic performance and 2.5% for tax effort.
The 14th Finance Commission had given 17.5% weight to the population of 1971 and 10% weight to the population of 2011. It gave 15% weight to area, 7.5% to forest cover and 50% to income distance.
Besides going for 'darshan' at the Ram temple in Ayodhya, the finance commission will also pay a visit to some developmental sites, as per the programme.
Chief minister Yogi Adityanath will host dinner for the commission on Tuesday evening.
On Wednesday, the state government will make a presentation about its development journey and efforts to achieve the trillion-dollar economy objective along with arrangements made for Prayagraj Maha Kumbh 2025 that attracted 66 crore pilgrims.
The commission will also meet representatives of Panchayat Raj Institutions, urban local bodies and trade and industry. The commission will meet representatives of political parties and also speak to media persons here on Wednesday.
On Thursday, the commission will leave for Varanasi from where the panel will proceed to New Delhi.