'Fin panel must incentivise performing states'

Finance minister Thangam Thennarasu says states should collectively advocate for 50% share in central tax devolution

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FINANCE Minister Thangam Thennarasu on Thursday urged the 16th Finance Commission to rethink its approach of redistribution of tax revenue to poorer states and adopt a framework that incentivises performance and fosters an environment where all states could thrive, rather than constraining the progress of those leading the way. He said the states should collectively advocate for a 50% share in the central tax devolution and urged the 16th Finance Commission to ensure that reliance on discretionary grants is reduced and the share of predictable and objective resource transfers are increased.

"The commission must devise a mechanism to restrict the use of cess and surcharges and recommend appropriate measures to protect the interests of states," he said.