UP wants 50% share in tax revenue, says Fin panel chief | Lucknow News

Lucknow: The 16th Finance Commission is open to the suggestion of increasing the states’ share in tax revenue from the existing 41%, said Finance Commission chairman Arvind Panagariya.Many states, including UP, have demanded that the tax revenue distribution between the Centre and states be raised from 41% to 50% in vertical devolution, which would mean more money to the states from the central govt’s coffer, said Panagariya at a press conference in Lucknow on Wednesday. The panel was in the state capital as part of its consultation visit to all states in the country. The panel met with Chief Minister Yogi Adityanath and senior UP govt officials, Panagariya said the Commission was open to all suggestions, but added that the final decision would be taken after meetings with all stakeholders.Panagariya, however, said the increase from 41% to 50% is steep and may not be plausible. Asked if the vertical devolution would be raised to a reasonable limit even if not 50%, Pangadhiya said the commission would submit its report to the President of India after meeting all stakeholders.Delving in detail about the UP govt’s demand before the Finance Commission, Panagariya said UP wants criterion of area of the state be reduced from existing 15% to 10%, while criterion based on population be increased from existing 15% to 22.5%. Similarly, UP govt has demanded reduction on population performance from existing 12.5% to 7.5% and tax effort criterion from 2.5% to 10%, he added.He termed UP’s tax collection as good and said the state budget was within the prescribed FRBM limit of 3%.Panagariya also praised UP’s SGST collection and its reformist approach in the recent years. He said the Commission took detailed feedback from CM Yogi Adityanath and finance minister Suresh Khanna, chief secretary Manoj Kumar Singh and ACS finance Deepak Kumar.Panagariya said UP was the last of 28 states that the 16th Finance Commission is visiting. Next the panel will meet officials of key departments including the Union finance department before the panel prepares its report. Panagariya said in the past reports submitted by Finance Commissions were accepted in totality by the President.The 16th Finance Commission of India was constituted in Dec 2023 and would recommend the distribution of tax revenues between the Centre and the states for a five-year period starting April 1, 2026. It is expected to submit its report later this year.