Stalin Demands 50% Share of Central Taxes for Tamil Nadu, Cites Strain

By siliconindia  |  Monday, 18 November 2024, 05:49:23 PM IST

Stalin Demands 50% Share of Central Taxes for Tamil Nadu, Cites Strain
Tamil Nadu Chief Minister MK Stalin urged for an increase in the state's share of central taxes to 50%, highlighting concerns over reduced fund devolution and the growing financial strain caused by centrally-sponsored schemes.
Speaking to the Chairman and members of the 16th Finance Commission at the Secretariat in Chennai, Stalin emphasised the need for a revised fiscal framework that supports developing states like Tamil Nadu. He argued that allocating additional funds to high-performing states would enhance India’s overall development and economic strength.
“A new approach should ensure that developing states are not adversely affected by reduced central allocations. Steps must be taken to strengthen India’s federal structure”, Stalin said. He urged the Commission to frame recommendations that meet Tamil Nadu’s aspirations and facilitate its contributions to India becoming an economic superpower.
The Chief Minister raised concerns about the gap between the 15th Finance Commission's recommendation of a 41% revenue share for states and the actual average devolution of 33.16% over the past four years. He pointed out that this discrepancy, coupled with reduced central allocations for joint projects and rising implementation costs, has further strained state finances.
 “This burden on states can be eased by increasing the Centre’s share to 50%, which would also enable states to manage their finances with greater autonomy”, Stalin asserted.
He also noted the disproportionate fiscal responsibility borne by Tamil Nadu in addressing natural calamities, infrastructure rebuilding, and funding social security schemes. The Chief Minister stressed that a decline in central allocations could hinder development efforts, impacting not only Tamil Nadu but also the country’s overall economic growth.
Stalin appealed to the Commission to adopt a strategy that prioritises equitable funding, allowing states to sustain their development trajectory and meet the needs of their populations.
Chairman Arvind Panagariya led the 16th Finance Commission team during their visit to Tamil Nadu. The delegation, which includes members Ajay Narayan Jha, Annie George Mathew, and Manoj Panda, will meet with political leaders, trade associations, and tour the Nemmeli desalination plant as part of their consultations.
 

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