E-Paper
Cheema pitches for hike in states’ share in divisive pool of taxes
Punjab's finance minister urges the 16th Finance Commission to enhance vertical devolution and address states' unique challenges for equitable resource distribution.
Says enhancement of vertical devolution from the current 41% will help address unique challenges faced by each states
Punjab finance minister Harpal Singh Cheema on Thursday emphasised the imperative for the 16th Finance Commission to acknowledge and address the unique challenges faced by each state while advocating for a significant enhancement of vertical devolution from the current 41% of the divisible pool to a much higher share.
Cheema also recommended the inclusion of cesses, surcharges and select non-tax revenues in the divisible pool to ensure a more equitable distribution of resources. He was addressing the 16th Finance Commission conclave of finance ministers of the opposition-ruled states at Thiruvananthapuram in Kerala, where he articulated the pressing concerns affecting states and outlined Punjab’s vision, aspirations, and expectations, setting the tone for a productive and insightful discourse.
The Punjab finance minister, who began his address by extending his heartfelt appreciation to the Kerala government for hosting the conclave, then proceeded to share Punjab’s constructive engagement with the 16th Finance Commission, shedding light on pressing concerns such as the stark disparity between social and developmental expenditures, and the constrained fiscal autonomy resulting from the implementation of GST.
Additionally, Cheema urged the Finance Commission to develop a nuanced formula that allocates resources based on a state’s developmental performance and provides targeted support to underperforming states, thereby fostering a more inclusive and balanced growth trajectory. He said that the state has also made certain suggestions to make the Fiscal Responsibility and Budget Management (FRBM) Act more inclusive during the discussions with the Commission. He also underscored the critical need for robust disaster management, a resilient federal structure, and harmonious Centre-State relations.
The Punjab finance minister also appealed to the Commission to revitalise and fortify the federal framework, guaranteeing that every state is an integral part of India’s growth narrative and that no region is relegated to the periphery of progress. In his closing remarks, he reiterated the imperative for synergistic cooperation and collective advancement among states, underscoring that India’s true potential can only be unlocked when all regions progress in tandem, united in their pursuit of a brighter future. The conclave was attended by the deputy chief minister of Telangana, finance ministers of Kerala and Tamil Nadu, and the revenue minister of Karnataka.
