Kerala's Quest for Fair Share in Central Taxes: A Bold Demand

Kerala is seeking an increase in its share of central taxes to 50% and a reduction in the per capita-based share from 45% to 30%. The state also requests increased disaster relief funds, citing significant revenue losses and natural disaster challenges. Discussions are ongoing with the Finance Commission.

Kerala is making a strong pitch to increase its share of central taxes from the current 41% to 50%, while simultaneously calling for a reduction in the per capita-based share that states receive from the central divisible pool, from 45% to 30%.

Arvind Panagariya, Chairman of the 16th Finance Commission, indicated that these demands, as well as a request for an enhanced disaster relief fund, reflect Kerala's concerns about being financially penalized for effective population control and economic growth. The commission is considering these proposals carefully.

Aimed at addressing what it sees as financial inequities, Kerala has also called for higher central contributions to state-sponsored projects and disaster relief, citing the unique challenges it faces, including coastal erosion and landslides.

(With inputs from agencies.)