Kerala Hosts Interstate Conclave to Address Fiscal Needs for 16th Finance Commission

Kerala will host a conclave with five opposition-ruled states, including Punjab, Tamil Nadu, Karnataka, and Telangana, to discuss their fiscal needs for the upcoming 16th Finance Commission. The event aims to demand more funds from the NDA-led central government.

The Kerala government is set to host an interstate conclave featuring five opposition-ruled states to deliberate on their fiscal needs ahead of the 16th Finance Commission, according to state Finance Minister KN Balagopal.

In addition to the Left-ruled Kerala, the AAP-governed Punjab, DMK-led Tamil Nadu, and the Congress-ruled states of Karnataka and Telangana will participate in the event. This move is viewed as an effort by these states to seek increased financial allocations from the NDA-led central government. Kerala Finance Minister KN Balagopal disclosed that the conclave would be inaugurated on September 12 by Chief Minister Pinatayi Vijayan, with the state opposition leader also in attendance.

Balagopal further mentioned that finance ministers from Tamil Nadu, Karnataka, Telangana, and Punjab will be present, along with finance secretaries from the five states. Detailed discussions will focus on various aspects of the finance commission. The Kerala finance minister emphasized the importance of this event, noting that renowned economists and administrative experts, including former union government finance advisor Aravind Subramanyam, would also be participating. He stressed that the conclave is crucial for fiscal federalism, especially as the 16th Finance Commission wraps up its meetings and prepares reports for next year.

Balagopal highlighted the significance of differing opinions among states on key fiscal issues, essential for the health of fiscal federalism. Constituted on December 31, 2023, the Finance Commission is led by Chairman Arvind Panagariya and has already begun state consultations. The commission's recommendations will cover a five-year period starting April 1, 2026, and include suggestions for financing disaster management initiatives. According to the 15th Finance Commission's guidelines, the centre should allocate 41% of tax collections to states, known as vertical devolution, with distribution among states based on criteria like demographic performance and fiscal management measures.

(With inputs from agencies.)