Thiruvananthapuram
Kerala Chief Minister Pinarayi Vijayan has called for a significant increase in the share of taxes distributed to states, proposing that they receive 50 percent of the Union’s tax revenue. This proposal was made during a meeting with finance ministers from opposition-ruled states, as they prepared for the 16th Finance Commission’s recommendations.
The meeting, attended by representatives from Telangana, Karnataka, Punjab, and Tamil Nadu, aimed to address key issues related to tax distribution. Vijayan emphasized the need for a higher state share, citing Kerala’s previous request to the 15th Finance Commission. He highlighted a growing fiscal imbalance between the central government and states and urged a united effort to influence the 16th Finance Commission.
Currently, states receive 41 percent of central taxes based on factors such as population, area, and forest cover. Vijayan also called for a fairer distribution, arguing that states with lower per capita income should receive adequate support, while those making progress in health and education should not face reduced tax shares.
He pointed out that Kerala’s share of tax revenue has decreased from 3.05 percent under the 11th Finance Commission to 1.92 percent under the 15th. Vijayan stressed that the new tax distribution formula should address the needs of states that have made significant strides in various development indicators.
The meeting was a step towards presenting these concerns to the 16th Finance Commission, which will set the tax distribution guidelines for the next five years starting April 1, 2026.
