Look Beyond Usual Metrics for Centre-State Tax Share

Sixteenth Finance Commission member Manoj Panda also highlighted need for give and take

- Rhik Kundu

The Sixteenth Finance Commission may need to go "a bit beyond" the standard parameters while computing the share of the country's revenue kitty that is divided among states and the Centre, Manoj Panda, a member of the Commission, said.

Panda's 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 tax revenue.

Panda also said that 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.