West Bengal Seeks Higher Tax Share: Demands and Proposals to Finance Commission

The West Bengal government, led by Chief Minister Mamata Banerjee, has requested the Sixteenth Finance Commission to increase tax devolution from 41% to 50%. Proposals include new criteria for urbanisation and adjustments to population weightage to better reflect demographics and address income disparities.

The Sixteenth Finance Commission's Chairman, Arvind Panagariya, announced on Tuesday that the West Bengal government has put forth a proposal to raise the tax devolution share to states from 41% to 50%. This request comes as the Commission is meeting with various states to discuss tax distribution criteria.

While visiting the city, Panagariya noted that a majority of the 13 states consulted so far have advocated for a 50% tax devolution increase, with some suggesting a smaller rise to 45%. West Bengal is particularly focused on altering the criteria for this distribution.

Chief Minister Mamata Banerjee has proposed several changes, including introducing a 7.5% weightage for urbanisation, removing the 10% forest and ecology criteria, and adjusting other demographics for more fairness in income distribution. The Finance Commission is engaging with all 28 states for feedback, with consultations continuing until mid-May.

(With inputs from agencies.)