Raise devolution of tax revenues to states to 50%: Hry

THE STATE GOVT ALSO PROPOSED A NEW CRITERION — REVENUE LOSS DUE TO INTRODUCTION OF GST WITH A 15% WEIGHTAGE

- Hitender Rao

CHANDIGARH: Haryana has told the 16th finance commission that the devolution of tax revenues from the Centre to the states should rise from the current 41% to 50%, panel chairman Arvind Panagariya announced on Monday, adding that the Bharatiya Janata Party-ruled state also made a flurry of other recommendations.

At a meeting with chief minister Nayab Singh Saini and senior officials, Panagariya explained that the finance commission's primary role was to recommend the division of the Union's tax revenues between the Centre and the states (vertical devolution), and further among the states (horizontal devolution), besides grants for local bodies and disaster relief.

"On vertical devolution, Haryana's recommendation was very similar to what most other states have said - that devolution to the states be increased from its current level of 41% of the divisible pool to 50%. It is a big ask to make such a big jump. It is very unusual though not unprecedented," Panagariya said.