E-Paper
Finance panel again urged to hike states’ revenue share
The 16th finance commission on Friday held a meeting with economists and policy experts from Punjab, Haryana, Himachal Pradesh, Uttar Pradesh and Uttarakhand in Delhi. Upinder Sawhney, former professor at Panjab University, Chandigarh, who was invited to represent the case of Punjab, made a case for increasing the share of vertical devolution to the states to 50% from the current 41%.
The 16th finance commission on Friday held a meeting with economists and policy experts from Punjab, Haryana, Himachal Pradesh, Uttar Pradesh and Uttarakhand in Delhi. Upinder Sawhney, former professor at Panjab University, Chandigarh, who was invited to represent the case of Punjab, made a case for increasing the share of vertical devolution to the states to 50% from the current 41%. She also pointed out that the share of cesses and surcharges, which are not in the divisible pool, in gross tax revenue of the Centre has increased from 9.2% in 2012-13 to 19.9% in 2020-21.
She urged the commission to recommend a constitutional amendment so that these could be made a part of the divisible pool. The Punjab government had also taken up these two issues during its meetings with the 16th finance commission, headed by Arvind Panagariya, in Chandigarh earlier this week.
Prof Sahney also made a case for a special one-time settlement grant, which may be subject to conditionalities, for Punjab in view of its burgeoning debt which has its genesis in fighting terrorism four decades ago. She also pointed out the fiscal profligacy of Punjab and argued that despite that Punjab needs hand-holding as it is losing out on a lot of economic resources because of environmental degradation as a result of making the country food self-sufficient and its 553-km long border with Pakistan and more importantly the suspension of trade on Attari-Wagah border.
