Bengal urges Finance Commission to increase vertical devolution of taxes to States
Sixteenth Finance Commission Chairman, Arvind Panagariya on Tuesday, said the West Bengal government has urged the commission to increase the vertical devolution of taxes to States from the current 41 per cent to 50 per cent. The State government also proposed significant changes to the criteria for weightage in horizontal allocation.
The government has proposed to include “urbanisation” as one of the criteria for horizontal devolution of States share of Central taxes during the meeting with the members of the Finance Commission.
After meeting with State government delegations, headed by Chief Minister Mamata Banerjee, Panagariya said, “In vertical devolution, the West Bengal government, in its plea, demanded that the devolution be increased to 50 per cent.”
Notably, most of the 13 States the commission has visited so far have demanded raising the devolution of taxes to 50 per cent, while some asked the panel to increase it to 45 per cent from the existing 41 per cent. Vertical devolution is the distribution of tax proceeds between the Centre and States in the country.
