The Finance Commission held discussions in Lucknow on revising the share of central taxes allocated to states. Currently, 41% of central tax revenue is distributed among states, states have demanded an increase to 50%.
During a press briefing at Lok Bhawan, commission head Panagariya clarified that while some increase may be possible, meeting the full 50% demand would be difficult. The Commission’s recommendations, once finalized, are submitted to the President of India, who usually accepts them.
UP officials presented special proposals, suggesting a reduction in area based share from 15% to 10%, and forest/environment share from 10% to 5%. The state also asked for 10% weightage based on tax collection and 7.5% on demographic performance.
Panagariya acknowledged UP's top ranking in GST collection, calling it a sign of economic strength. He said the Commission evaluates each state's fiscal needs through regional visits and will consider UP's requests seriously.
Beyond tax distribution, the Commission also proposes allocations for panchayats, urban bodies, and disaster relief, areas critical to states like UP. Final recommendations will aim for balanced and fair resource sharing.
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