Proposals to Reflect NE’s Socio-Economic and Geographical Context: Arvind Panagariya
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Synopsis
On Jan 30, in Agartala, Chairman Arvind Panagariya announced that the recommendations of the 16th Finance Commission will consider the socio-economic and geographical contexts of the northeastern states, ensuring a tailored approach to their unique situations.
Key Takeaways
- 16th Finance Commission focuses on northeastern states.
- Tax devolution demands from northeastern states.
- Tripura's economy is well-managed.
- Urbanization is accelerating in Tripura.
- Recommendations due by October 2025.
Agartala, Jan 30 (NationPress) The 16th Finance Commission will consider the socio-economic and geographical contexts of the northeastern states while formulating its recommendations, stated panel chairman Arvind Panagariya on Thursday.
He mentioned that similar to other states, the northeastern region is advocating for an increase in the tax devolution from the Centre, which currently stands at 41 percent, while the government of Tripura is pushing for a 50 percent increase.
During a media briefing on the second day of his visit, Panagariya highlighted that Tripura is the 17th state in India, and the Commission has already engaged with the state governments to hear their demands and perspectives.
“The Commission has yet to visit Mizoram and Arunachal Pradesh among the eight northeastern states,” he noted.
Expressing appreciation for the satisfactory forest cover in the northeastern states, the Chairman pointed out that, owing to the hilly terrain, there are higher costs associated with infrastructure development and logistics.
He explained that for Centrally Sponsored Schemes (CSS), the funding ratio for northeastern states is 90:10, where 90 percent is provided by the Union government, and 10 percent by the respective state, unlike the 60:40 ratio applicable to other states.
By October this year, the Commission aims to finalize its recommendations based on the population ratio. According to the 15th Finance Commission, the tax devolution ratio was defined as 59 percent for the Union government and 41 percent for the 28 states of India.
The chairman emphasized that Tripura's economy is well-managed and that the state’s financial condition is stable.
A meeting was also conducted with Tripura Chief Minister Manik Saha, along with Chief Secretary J K Sinha, Finance Secretary Apurba Roy, and senior officials from various departments.
Panagariya noted that the state's committed expenditure and debt have been trending downwards, which is encouraging. He indicated that Tripura's reliance on the agricultural sector is 30-35 percent, lower than the national average of 45 percent.
He mentioned that urbanization is progressing rapidly in Tripura. Despite the state’s per capita income and the quality of economic and social services being below the national average, efforts are being made to bridge the gap with other states.
Following the council of ministers, the Commission conducted multiple meetings with Panchayat Raj institutions, urban local bodies, representatives of the Tripura Tribal Autonomous District Council (TTAADC), political leaders, and industry representatives.
Chief Minister Manik Saha shared a post on X after the meeting with the Finance Commission, stating: “The discussions revolved around critical priorities for state development, emphasizing sustainable growth, infrastructure improvement, and addressing distinct regional challenges. I am optimistic that this partnership will lead to a prosperous future for Tripura.”
The Finance Commission Chairman, along with four members and accompanying officials, toured various tourist destinations including the Gomati, Sepahijala, and West Tripura districts.
The 16th Finance Commission was established on December 31, 2023, with Panagariya, former Vice-Chairman of NITI Aayog, as its Chairman.
The four full-time members include Ajay Narayan Jha, a past member of the 15th Finance Commission and former Secretary of Expenditure, Annie George Mathew, former Special Secretary of Expenditure, Manoj Panda, former director at the Institute of Economic Growth, and Soumya Kanti Ghosh, Group Chief Economic Advisor at the State Bank of India.
Officials have indicated that the recommendations of the 16th Finance Commission will be released by October 31, 2025, covering a five-year award period commencing on April 1, 2026.
