West Bengal Pushes for Increased Tax Devolution Amid Fiscal Challenges

West Bengal's government, led by Chief Minister Mamata Banerjee, urged the Sixteenth Finance Commission to increase tax devolution from the current 41% to 50%. The commission, chaired by Arvind Panagariya, was presented with suggestions aimed at addressing the state's fiscal challenges and promoting equitable resource distribution.

The West Bengal government, under Chief Minister Mamata Banerjee, has made a strong request to the Sixteenth Finance Commission for an increase in tax devolution from the current 41 per cent to 50 per cent. The initiative is part of a broader strategy to address the state's fiscal challenges.

Arvind Panagariya, Chairman of the Finance Commission, highlighted that many states share West Bengal's demand for increased tax devolution. Proposed changes include adjustments to weightage criteria in horizontal allocations and new urbanisation-based weightage, while advocating for the exclusion of forest and ecology criteria.

Chief Minister Banerjee also expressed concerns over central funding restrictions and advocated for increased income criteria weightage. The commission is considering these proposals amid visits to all 28 states, aiming for a balanced fiscal approach.

(With inputs from agencies.)