Bhubaneswar: The Mohan Majhi government on Thursday sought Rs 12,59,158 crore from the 16th Finance Commission headed by Dr Arvind Panagariya.
During a meeting attended by CM Majhi and senior state government functionaries with the visiting 5-member commission here, Odisha requested for the funds in the next five years to implement its ‘Samruddha Odisha by 2036’ plan.
It demanded bringing cesses and surcharges into the divisible pool of taxes and increasing states’ share in central taxes from the existing 41% to 50% under vertical devolution (distribution of net proceeds of taxes between the Union and states). Besides an increase in the state’s share in total tax devolution from 4.528% to 4.964%, it also suggested some changes to the criteria in horizontal devolution (distribution of net proceeds of taxes among states). Those are:
(1) A weightage of 15% is given to a state’s population share in the country. Odisha wants the criterion to be changed to “Vulnerable Sections of People” comprising number of SC/ST population & persons with 80+ age, but with same weightage.
(2) Now area is a criterion. Odisha wants it to be changed to density of population with 5% weightage.
(3) Now, forest & ecology 10% weightage. Odisha wants it to be changed to “forest cover” with same 10% weightage.
(4) Income Distance criterion carries 45% weightage. Odisha wants it at 45%.
5) Odisha wants the tax & fiscal effort by state with 2.5% weightage, to be changed to Fiscal Discipline with 15% weightage.
6) Odisha wants the demographic performance weightage to be brought down to 10% from 12.5%.
Specifying the demands in different categories, the CM said we have sought Rs 9,88,422 crore to make up for pre-devolution revenue deficit, Rs 1,10,434 crore for state specific need, Rs 1,00,036 crore as grants to local bodies, Rs 31,004 crore for disaster response and Rs 29,252 crore for disaster mitigation. “The 16th Finance Commission may peg combined grants for all rural and urban local bodies at 2% of the projected gross revenue receipts of the Union for the award period of 2026-31. This will enhance grants for local bodies of the state,” he said.
Majhi also mentioned about its demand for 100% grant from the Centre to State Disaster Response Fund. “Apart from this, the Commission may recommend grant for specific purpose transfer for health, water supply & sanitation and old age security,” he added.
On Tuesday, the 16th Finance Commission team arrived in Odisha on a four-day visit and visited Khandagiri, Udayagiri and Kalabhoomi. The Commission members went to Puri on Wednesday to seek blessings of Lord Jagannath and also visited Sun Temple in Konark.
Notably, the 15th Finance Commission (FC) headed by NK Singh had recommended a transfer of Rs 2.22 lakh crore to Odisha for five years from 2021 to 2026, against a demand of Rs 8.24 lakh crore. The state’s share in total tax devolution of Rs 12,47,211 crore stood at 4.528% in 2024-25. The total revenue devolution to state governments was enhanced from 30.39% of gross tax revenue (GTR) in 2023-24 to 32.48% in 2024-25 budget estimate (BE) to support state finances and spur economic development
