West Bengal Calls for Increased Tax Devolution to Address Resource Disparities

West Bengal has urged the Finance Commission to increase tax devolution to states from 41% to 50% and proposed changes to allocation criteria. The state suggests a focus on urbanization, demographics, and area weightage to reflect local challenges. Discussions continue with significant fiscal policy implications.

In a recent move, West Bengal has formally requested the Finance Commission to raise the devolution of taxes to states from the existing 41% to 50%. Finance Commission Chairman Arvind Panagariya discussed these developments while visiting the state.

The West Bengal government proposes several changes in the criteria for tax distribution, emphasizing urbanization and demographic realities. The state argues that increased weightage for these factors will better reflect its needs and address income distribution disparities.

Chief Minister Mamata Banerjee highlighted fiscal challenges and expressed concerns over the current revenue sharing framework. She also voiced opposition to restrictions on centrally sponsored scheme branding and fund transfer practices, calling for greater fiscal autonomy.

(With inputs from agencies.)