Resource allocation

Finance Commission needs to address multiple issues

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The 16th Finance Commission has about six months to submit its report. Its recommendations will cover five years starting April 1, 2026. As reported by this newspaper last week, the Finance Commission has visited most states to record their views on the sharing of fiscal resources. The Finance Commission is constituted under Article 280 of the Constitution, mainly to recommend the distribution of tax revenues between the Union and the state governments. The commission, in its visits to states, is reported to have received at least three kinds of views. First, most states, including those run by the National Democratic Alliance, want the state share in the divisible pool to be increased to 45-50 per cent from the current 41 per cent.