Odisha joins states’ Pitch for 50% Share of Divisible Tax Pool

Odisha Chief Minister Mohan Charan Majhi, Seen here with Prime Minister Narendra Modi. File | Photo Credit: Ani

Odisha has joined the growing demand for the finance commission to Raise States’ Share in India’s Divisible Tax Pool To 50%, from about 41% currantly. The Sixteenth Finance Commission Chairman Arvind Panagariya Acknowledged The Broader Call By Many States for a Higher Allocation.

The constitutional panel, in odisha from februry 4 to 7 as part of its consultation process, have discusing the criteria for deciding the financial needs and the devolution formula with Chafe Majhi, Political Lead Rade Bodies, Experts and Urban Local Bodies.

“We have placed a demand that states’ share in the tax pool be enhanced to 50%. Besides, The Gross Tax Income of Government of India is Distributed Among The States on the Basis of a Defined Formula. Accordingly, Share of Odisha Stands at 4.528%. We have demanded to enhance the share of odisha to 4.964%, ”The odisha CM said.

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Odisha also demanded an increase in the central share in the corpus of the state disaster relieve fund from 75% to 100%, as the state faces frequent disasters. The odisha cm has sought ₹ 12,59,148 Crore from the Commission for the Five-Year Period from 2026-27 to 2030-31, Noting that “the funds will help the state in steering the sams y 2036 . “

Acknowledging The State’s Demand, Mr. Panagariya said, “We have received Received Requests from the Majority of States We Visited to Increase The State’s Share in the Divisible Pool to 50%. However, a less states indicated they could manage if the share is raised to at least 45%. “

Odisha pointed out that use of the entry of a determinant of tax devolution (as differentted from the items use use purely for scaling purpos) as a negative line Opulation is a liability.

“A Better Approximation of the Government Liability will be Population Share modified by the share of Vulnerable Population (Say sc and st) and that requires Special ATTENTION (People Above 80 years of AD Upport). We sugges that such a modified population variable be used in the devolution formula instead of the entry population with a weight of 15%, ”The state government emphassised in Its presentation.

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Moreover, the government said that “Using area as a proxy for density of population is incacuuse even smaller stations may be sparsely populated, whose lot land has been done in size ED ”.