Punjab Demands 50% Share in Central Taxes | Finance Commission

Chandigarh, Jul 22 (PTI) The 16th Finance Commission chairman Arvind Panagariya on Monday said the Punjab government has demanded that the states should get 50 per cent of taxes collected by the Center as their share, instead of 41 per cent at present.

The 16th Finance Commission, which is visiting Punjab, on Monday held meetings with Punjab Chief Minister Bhagwant Mann and top brass of the state government here.

Addressing the media here, Panagariya said during a meeting, CM Mann gave the general overview of Punjab on economic and finance fronts and the state FM also spoke on the same lines.

"The state finance secretary gave a presentation. He covered all the important areas of the economy starting with socio-economic profile of Punjab, demographic profile, fiscal profile, impact of goods and services tax on Punjab's revenues, various aspects of it," said Panagariya.

The finance secretary also talked at length about the challenges facing Punjab, in which he discussed issues relating to growth, he said.

Sharing details about the finance commission, Panagariya said the commission is appointed every five years.

"The key mandate of the finance commission is to make recommendations on how the central taxes, which are sharable, should be divided first between the Centre and 28 states and then whatever is the kitty of 28 states, how that should be divided among the 28 states.

The first division between the Centre and 28 states taken together is called vertical division. Second, the division of the kitty among 28 states is called horizontal division or horizontal devolution," he said.

"The recommendation or the demand from the state of Punjab on this was, as far as vertical devolution is concerned, should be increased in favour of the states from its current level of 41 per cent to 50 per cent, meaning that whatever taxes that are shareable, 50 per cent of those should go to the states and 50 per cent to the Centre as opposed to what is the current division which is 41 per cent to the states and 59 per cent to the Centre," he added.

The commission comprised members including Soumyakanti Ghosh, Annie George Mathew, Ajay Narayan Jha and Manoj Panda.