Kerala CM Criticizes Rising Cess and Surcharge, Calls for Increased State Share in Divisible Tax Pool

Kerala CM Criticizes Rising Cess and Surcharge, Calls for Increased State Share in Divisible Tax Pool

Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan has raised concerns over the central government's growing reliance on cess and surcharges, which, he argues, is reducing the share of states in the divisible tax pool. Speaking at a conclave of non-BJP-ruled states organized by Kerala, Vijayan pointed out that these levies are excluded from the divisible tax pool, contradicting recommendations from the Finance Commission that called for a larger allocation of tax proceeds to the states.

Vijayan urged the upcoming 16th Finance Commission to address this trend and proposed increasing the states' share in the divisible pool from the current 41 percent, as recommended by the previous Finance Commission, to 50 percent. He argued that such an increase is essential to rectify the growing vertical fiscal imbalances between the Centre and the states.

The Chief Minister also called upon experts and policymakers to support this demand, emphasizing the need for a more equitable distribution of tax revenues to strengthen the fiscal autonomy of states ahead of the 16th Finance Commission's deliberations.