Northeastern States Request Finance Commission for Higher Tax Devolution

Guwahati: A top team of officials from four north eastern states has appealed to the 16th Finance Commission to significantly increase their share of federal tax collections, on grounds of the need for more fiscal support in sustaining the momentum of economic growth in the region.

The delegation, headed by Meghalaya Chief Minister Conrad K. Sangma, met Finance Commission Chairman Arvind Panagariya in New Delhi with an appeal for better resource distribution. The delegation comprised Mizoram Chief Minister Lalduhoma, Tripura Finance Minister Pranajit Singha Roy, and high-ranking Sikkim government officials.

The states have collectively put forth a minimum of a 25 per cent boost in tax devolution over what was being offered by the 15th Finance Commission. They also sought the formation of a specific infrastructure fund to meet the area's specific developmental issues.

In the meeting, Chief Minister Sangma emphasized real gains made from past increases in funding. A 20 per cent increase in devolution between the 14th and 15th Finance Commissions had led to a 100 per cent increase in state capital spending, he mentioned. This extra budget space, he added, had led to tangible improvements in areas of healthcare, tourism, and infrastructure.

ALSO READ: NITI Aayog Releases Second Edition of NER District SDG Index; 85% Districts Show Progress

The delegation stressed that while the north eastern states had made considerable economic strides in recent years despite scarce own-source revenues, continued investment was needed to consolidate gains and offset entrenched geographical and infrastructural handicaps.

The Finance Commission is central to the allocation of central tax revenues across states for five-yearly periods, the ongoing one running until 2026. For smaller Northeastern states, such allocations tend to be determinative of development project planning and implementation.

Commission officials reacted warmly to the presentation, both recognizing the peculiar challenges confronting the region and its economic record under the present commission. The four states also presented a joint memorandum detailing their collective demands and development imperatives.