16th finance commission to meet Punjab top brass today

The 16th finance commission reached Chandigarh on Sunday evening for a meeting with the top brass of the Punjab government which plans to seek revenue deficit grant and special central assistance to help the border state tide over the fiscal and other challenges

Chandigarh : The 16th finance commission reached Chandigarh on Sunday evening for a meeting with the top brass of the Punjab government which plans to seek revenue deficit grant and special central assistance to help the border state tide over the fiscal and other challenges.

The 16th finance commission reached Chandigarh on Sunday evening for a meeting with the top brass of the Punjab government which plans to seek revenue deficit grant and special central assistance to help the border state tide over the fiscal and other challenges.

The state government, which was sanctioned a post-devolution revenue deficit grant of ₹25,968 crore by the 15th finance commission with a declining trajectory over a period of five years, will plead for the continuation of the grant for next five years.

“We will also urge the commission to increase Punjab’s share of central taxes for higher allocation for agriculture, education, local bodies, infrastructure, industrial development, border areas and state-specific special needs such as crop diversification and groundwater conservation during the award period as it one of the highest revenue-deficit states after taxes and cess on foodgrains were subsumed under the goods and services tax,” said a senior government functionary on the condition of anonymity.

The Punjab government, while pleading its case, is also likely to call attention to the ‘legacy debt’ inherited from the previous regime. These issues will be raised by the state top brass led by chief minister Bhagwant Mann and finance and taxation minister Harpal Singh Cheema on Monday during their meeting with the finance panel headed by former Niti Aayog vice-chairman Arvind Panagariya.

The state authorities would, however, find it hard to explain their freebies and rising subsidy burden.

Panagariya has made it clear that the commission would also address the issue of freebies which have proliferated and there is competition among the states and political parties to give freebies.

The 15th finance commission had also suggested a reform roadmap for Punjab to deal with unsustainable debt patterns, rationalisation of power subsidy to restore the water table and soil fertility, fiscal course-correction for sustainable stream of enhanced revenues and increase in capital expenditure, but the state continues to be in the tight grip of debt.

The visiting delegation will later meet the leaders of political parties, representatives of panchayati raj institutions and urban local bodies and other stakeholders. It will also visit Amritsar on Tuesday.

The finance panel is a constitutional body established once every five years to recommend the formula and proportion for distribution of tax revenues collected by the central government among the Centre and various states in the country.

The 16th finance commission was constituted by the Centre in December 2023 and requested to make its recommendations available by October 31, 2025, covering an award period of five-year commencing April 1, 2026.