States Must Go Beyond Usual Metrics for Revenue Share

Finance commission member Panda's statement seeks to address wealthier states' demand

- Rhik Kundu

The Sixteenth Finance Commission that has just completed its round of state visits may have to go "a bit beyond" the standard parameters while computing the share of the country's revenue kitty between states and the Centre, Manoj Panda, a member of the commission, said.

While Panda did not elaborate, his statement comes amid a growing clamour from wealthier Indian states—typically bunched around the western and southern regions—to be given a bigger share of the revenue.

Panda did mention, however, that the states' tax-to-Gross State Domestic Product (GSDP) ratios have remained stuck at 6-7% levels and that future tax collections will primarily hinge on GSDP growth. His remarks, made in an interview with Mint, come as the 16th Finance Commission enters the deliberation phase, having completed its round of state visits over the past year.

The Commission, chaired by Arvind Panagariya, is now going through detailed memorandums submitted by various states and departments to shape its recommendations for the 2026-31 period.