Haryana Makes Pitch for Higher Revenue Share from Union Govt

The BJP government in Haryana has made a pitch for a higher devolution of revenue from the Centre asking the 16th Finance Commission to consider rewarding high-performing states in devolution formula.

- Hitender Rao

CHANDIGARH:

The 16th Finance Commission headed by Arvind Panagariya held day-long meetings with chief minister Nayab Singh Saini and officials in Chandigarh to discuss the devolution of tax revenue, both vertical as well horizontal, among the Centre and states and among different states, respectively. While Haryana's per capita collection of goods and service tax (GST), as per an official document, came to ₹40,595 in 2023-24 fiscal, the per capita gross transfer of funds in 2023-24 was a mere ₹8,581 only. As per the 15th Finance Commission, Haryana's share in devolution of central taxes and duties was 1.09%. The state received the lowest share of central devolution at 17% (as percentage of state's revenue) among 20 major states in 2023-24.

Panagariya at a briefing said that Haryana has made a good case on enhancement of devolution. "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 divisible pool to 50%. It is a big ask to make such a big jump. It is very unusual though not unprecedented," Panagariya said.

State recommends higher weightage for tax and fiscal effort criteria, reduction in weightage for population criteria.

The chairman of the 16th finance commission said that Haryana has a radically different set of suggestions on horizontal devolution as to how the share of the states ought to be divided among different states.