Assam Pushes For Revised Tax Devolution Criteria at 16th Finance Commission Meeting

The 16th Finance Commission Chairman, Arvind Panagariya, reported concerns from Assam Chief Minister Himanta Biswa Sarma about the declining tax devolution for Assam, attributing it to lower taxes in neighboring states. Assam suggested criteria changes for tax devolution, which the 16th FC found to have merit.

Assam Chief Minister Himanta Biswa Sarma raised alarms over the decline in tax devolution for his state during a meeting with Arvind Panagariya, the Chairman of the 16th Finance Commission (FC), on Thursday.

Sarma articulated that the continual decrease in Assam's share of devolution since the 13th FC is linked to the lower taxes on petroleum products and liquor levied in neighboring states. These disparities are compensated by the FC, causing a revenue loss for Assam, Sarma said.

The Assam government proposed that different devolution criteria be applied to different states. While the 15th FC allocated 15% of states' share, Assam suggested reducing this to 10%. Panagariya acknowledged the merit in Assam's suggestions on various monetary issues.

(With inputs from agencies.)