16th Finance Commission Open to Listening to All States, Says Chairman Arvind Panagariya

16th Finance Commission Open to Listening to All States, Says Chairman Arvind Panagariya

The 16th Finance Commission, led by Chairman Arvind Panagariya, is committed to considering the views of all states and exploring all possibilities, including addressing concerns about reduced central allocations despite strong economic performance. Panagariya made these remarks during his visit to Telangana on Tuesday, where he and other Commission members met with state officials as part of their nationwide consultations.

Panagariya acknowledged that better-performing states, like Karnataka and Telangana, have raised concerns about a decrease in central funds despite their economic progress. "This is to be expected," he said, noting that the Commission has already heard similar feedback from other states. However, he emphasized that the Commission is open to listening to all viewpoints and would carefully weigh all factors before making any final recommendations. "What we will do in the end, I can't say because I don’t know yet," he added.

During their visit to Telangana, the Commission held separate meetings with Chief Minister A Revanth Reddy, representatives of political parties, and local bodies. Panagariya highlighted that Telangana's contribution to the national GDP and the importance of its Gross State Domestic Product (GSDP) were key topics in discussions about the horizontal distribution of funds among the country’s 28 states.

The visit comes ahead of a planned conclave by five opposition-ruled states—Kerala, Karnataka, Telangana, Tamil Nadu, and Punjab—on September 12. These states are advocating for a fairer share of fiscal resources in the upcoming Finance Commission’s recommendations.

When asked if the Commission would consider increasing the percentage of devolution in favor of states, Panagariya declined to comment, citing the early stage of deliberations. He also addressed the issue of disputes between the central and state governments over cess and surcharges, stating that resolving such issues would require cooperation between the union and state governments, as well as a Constitutional amendment.

The Finance Commission’s ongoing state visits and consultations are seen as a crucial step in determining the formula for distributing central funds, with an emphasis on balancing fiscal needs across states while recognizing their individual contributions to the national economy.