Latest news with #16thFinanceCommission
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Business Standard
6 days ago
- Business
- Business Standard
Andhra CM meets Sitharaman; seeks Rs 10,000 cr support for various projects
Andhra Pradesh Chief Minister N Chandrababu Naidu on Wednesday met Union Finance Minister Nirmala Sitharaman and sought additional financial support of Rs 10,000 crore for various projects. On his second day of the visit, the Telugu Desam Party (TDP) chief -- a key NDA ally -- highlighted that the state is still facing a deficit of financial resources due to bifurcation, an official release said. Naidu requested the central government to grant an additional allocation of Rs 10,000 crore under the Special Assistance to States for Capital Investment (SASCI) scheme for 2025-26. He sought the release of the second tranche of funds as a grant to Amaravati capital, and appealed to the Union Minister to make up for the revenue deficit faced by the state under the 16th Finance Commission. He submitted a memorandum requesting financial support for various state projects. The chief minister informed Sitharaman that the construction of Amaravati requires a total of Rs 79,280 crore, with works worth Rs 44,351 crore already underway. However, Rs 26,000 crore remains unallocated, the release stated. He emphasized the need for additional funds to complete the capital's development and requested that the second tranche of aid for Amaravati be disbursed as a grant. The chief minister also expressed gratitude to the central government for its support in the construction of Amaravati and the Polavaram project. Union Aviation Minister K Rammohan Naidu was among other TDP leaders present in the meeting. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
The Hindu
6 days ago
- Business
- The Hindu
Andhra Pradesh Chief Minister Chandrababu Naidu urges Centre to provide ₹10,000 crore under SASCI, revenue deficit compensation
Andhra Pradesh Chief Minister N. Chandrababu Naidu has appealed to Union Finance Minister Nirmala Sitharaman to allocate an additional ₹10,000 crore to the State under the Special Assistance to States for Capital Investment (SASCI) scheme for the financial year 2025–26. During a meeting held on the second day of his visit to New Delhi on Wednesday, Mr. Naidu submitted a representation seeking financial assistance for various key projects. He requested the Centre to accept Andhra Pradesh's appeal to the 16th Finance Commission for revenue deficit compensation, highlighting the continued financial strain caused by the bifurcation of the State. Mr. Naidu emphasised that the State still grappled with limited financial resources, which was affecting its developmental aspirations. The Chief Minister informed Ms. Sitharaman that while the estimated cost for the construction of the new capital Amaravati stood at ₹79,280 crore, works worth ₹44,351 crore had already been initiated. Of this, ₹26,000 crore had been mobilised so far. Mr. Naidu urged the Centre to release the next tranche of funds as a grant rather than a loan. He also expressed gratitude to the Union Government for its continued support to major infrastructure projects such as Amaravati and Polavaram irrigation project.
Mint
09-07-2025
- Business
- Mint
Need to go a bit beyond standard parameters: Finance Commission member
New Delhi: The Sixteenth Finance Commission that has just completed its round of state visits may have to go "a bit beyond" the standard parameters while computing the share of the country's revenue kitty between states and the Centre, said Dr Manoj Panda, a member of the commission said. While Panda did not elaborate, his statement comes amid a growing clamour from wealthier Indian states–typically bunched around the western and southern regions–to be given a bigger share of the revenue. Panda did mention, however, that the states' tax-to-GSDP (Gross State Domestic Product) ratios have remained stuck at 6-7% levels and that future tax collections will primarily hinge on GSDP growth. His remarks, made in an interview with Mint, come as the 16th Finance Commission enters the deliberation phase, having completed its round of state visits over the past year. The Commission, chaired by Dr Arvind Panagariya, is now going through detailed memorandums submitted by various states and departments to shape its recommendations for the 2026–31 period. "A major debate that has emerged is from the developed states in western India as well as southern India is that they are contributing more to the overall tax kitty of the country, but they are not getting adequate returns," Panda said. "Of course, in any federation, there has to be some give and take. The weaker states have to be supported, but developed states are saying that the low-income states can't be supported beyond a point," he added. Richer states have urged the 16th Finance Commission to take into account their contribution to national growth and tax revenue while recommending horizontal allocations across states. These states argue that while they contribute disproportionately to national GDP and tax collections, the distribution formula does not adequately reward their economic performance. 'They don't want to feel 'penalized'—a word that is often being used," Panda said. "I think we may have to go a bit beyond the standard parameters," he added. Standard parameters list the various metrics used by the 15th Finance Commission to decide on the division of the Central and state revenue kitty. These are: population, area (of the state), forest and ecology, income distance (disparities in per capita GDP), tax and fiscal efforts, and demographic performance. Panda said there is some scope to improve tax enforcement at the state level, but noted that states have little room to manoeuvre on indirect tax rates, which are governed by the GST Council. "The Commission completed the state visits just a month ago. Right now, discussions are going around state finances, general government finances and other related issues from the memorandums submitted by state governments, and presentations made by different central government departments regarding their past expenditure and expected levels for the next five years," Panda said. He added that the Centre's memorandum is expected by July or mid-August. The panel is working to an official deadline of 31 October, and Panda said that 'there is unlikely to be any delay." The 16th Finance Commission's recommendations will cover the five years from 1 April, 2026, to 31 March, 2031. The 16th Finance Commission, like its predecessors, is tasked with recommending how central tax revenues should be divided between the Centre and the states (vertical devolution), and how that share should be distributed among states (horizontal devolution). It will also assess funding needs for disaster management and for strengthening local governments. "You see the total kitty is given. We have to decide how much to keep for the Centre and how much to give to states. The 15th Finance Commission recommended a 41% share for states and 59% for the centre out of the divisible pool of the central taxes," Panda said. "The other thing is how to do the horizontal distribution. In the horizontal distribution too, the total is 100. The moment you give more to one, somebody else will suffer. These are the balancing acts we have to do. We can't keep everybody happy in a zero-sum game," he added. The debate also highlights diverging growth trajectories among states. While some traditionally weaker states are showing signs of improvement, Uttar Pradesh being a notable example, others continue to lag. "If the average income levels of states converge in the long run, resources needed on equity consideration will reduce," Panda said. On state-level debt, Panda observed that capital expenditure-related borrowing remains sustainable if managed within the prudential norms outlined in the Fiscal Responsibility and Budget Management (FRBM) framework. States are generally expected to maintain fiscal deficits within 3% of GSDP, he said. During the pandemic, however, this threshold was relaxed by an additional 0.5%, and the Centre allowed 50-year interest-free loans to support state spending, he added. "The Finance Commission can only suggest states keep their debt within a limit. Beyond that, the Centre and states will need to work together to keep expenditure, particularly subsidies, within bounds," he said. "Overall, there should be some kind of broad consensus among the governments to avoid competitive populism," Panda added. States are also demanding a higher share of central revenues, citing rising social sector commitments. Meanwhile, the Centre has increasingly leaned on cesses and surcharges, which fall outside the divisible pool, to meet its spending obligations, even after raising the states' share by 10 percentage points a decade ago. "It's a tough question to answer what exactly the requirements of the states are, and how they should be addressed. But, compared to a decade ago, states now are getting much more than before," Panda added.
Hindustan Times
08-07-2025
- Business
- Hindustan Times
Tripura FM demands spl attention to possible revenue deficit due to Bangladesh situation
Agartala, Tripura Finance Minister Pranajit Singha Roy has sought the 16th Finance Commission's special attention to the state's possible revenue deficit as its socio-economic condition has been impacted by political instability in Bangladesh, an official statement said on Monday. Tripura FM demands spl attention to possible revenue deficit due to Bangladesh situation The economy of the northeastern state, surrounded by Bangladesh on three sides, heavily depends on bilateral ties and export-import between the two sides, it said. "The 16th Finance Commission held an important meeting with the representatives of all the northeastern states in Delhi on Monday. Finance Minister Pranajit Singha Roy, who joined the meeting, strongly batted for help for the state's overall development and infrastructure building", the statement said. "The state's economy and revenue collection are largely dependent on Indo-Bangla relations and export and import. Given the prevailing situation- political instability, the state's socio-economic condition is adversely impacted. The medical tourism in the state is also hit by the present situation in the neighbouring country", Singha Roy stated in the meeting. The state finance minister urged the Finance Commission to "pay special attention to the state's possible deficit in revenue collection" in the wake of the present situation in Bangladesh, it said. Singha Roy also demanded special grants for the Tripura Tribal Areas Autonomous District Council for its overall development. Seeking special outlay for forestry and ecology, the minister also demanded special grants for building infrastructure, especially railway and road connectivity. "During monsoon, road connectivity and railway service suffer, disrupting supply lines to the state. Therefore, I urge the Finance Commission to allocate additional funds to handle such development," he said. Earlier, North Eastern Council secretary Satinder Kumar Bhalla held a meeting with the officials of the state administration in Shillong on July 4. Issues related to setting up an energy park and a diabetes research centre at Agartala, a gas-based power plant at Barmura and building a trauma centre in Dhalai district's Ambassa were discussed in the meeting, an official said. This article was generated from an automated news agency feed without modifications to text.
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Business Standard
08-07-2025
- Business
- Business Standard
Meghalaya CM seeks more funds for smaller NE states from finance commission
Sangma urged the finance commission to recommend higher fund devolution and more flexible schemes to help smaller states address critical sectors such as roads, healthcare, education, and tourism Press Trust of India Meghalaya Chief Minister Conrad K Sangma advocated for enhanced financial support to the smaller Northeastern states, citing their unique geographical, economic, and developmental challenges. Sangma took up the issue during his meeting with members of the 16th Finance Commission in New Delhi on Monday. North East States, while having their own unique and distinct issues, share common concerns and challenges. In this context, a joint memorandum from Mizoram, Tripura, Sikkim and Meghalaya, was submitted to the 16th Finance Commission, outlining the special needs and… — Conrad K Sangma (@SangmaConrad) July 7, 2025 "Our states face distinct issues related to terrain, infrastructure gaps, and limited revenue-generating capacities. We need special financial consideration to address these structural disadvantages," Sangma said at the meeting. He urged the finance commission to recommend higher fund devolution and more flexible schemes to help smaller states address critical sectors such as roads, healthcare, education, and tourism. Sangma also called for greater autonomy in the utilisation of centrally allocated funds, allowing states to design projects suited to their needs. The commission assured him that the submissions would be carefully examined. "North East States, while having their own unique and distinct issues, share common concerns and challenges. In this context, a joint memorandum from Mizoram, Tripura, Sikkim and Meghalaya was submitted to the 16th Finance Commission, outlining the special needs and developmental priorities of the region," Sangma posted on X. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
