Hoping to raise State’s share from the current 41 per cent to a more substantial 48 per cent, Dr Mohan Yadav led Government urged to the head of 16th Finance Commission, who is in Bhopal, to include multi-dimensional poverty as new criteria in a meeting. Highlighting appeals from Madhya Pradesh Arvind Panagariya, the Chairman, 16th Finance Commission, said that Madhya Pradesh has advocated for a 10% share of cess and surcharge, as the state currently receives no portion of these funds. The chairman added that the State Government also suggested including non-tax revenue in the vertical divisible pool. Panagariya stated, “Madhya Pradesh Government has suggested if cesses, surcharges, and non-tax revenue are included in the divisible pool, then the current level of 41% is acceptable. If not, then 48% of the share should be allocated to the states.”

 

Other states are demanding a 50% share from the divisible pool, he mentioned in Bhopal while addressing mediapersons. On the horizontal divisible pool, Panagariya noted that Madhya Pradesh would benefit from the income distance criterion as against rich state where per capita income is more. The State has also proposed a new criterion, multidimensional poverty, to be added to the share allocation. Regarding the remaining criteria for tax devolution, the MP government suggested that the Finance Commission should give weight to the Scheduled Caste and Scheduled Tribe (SC/ST) population. Madhya Pradesh demanded an additional 10% allocation for the SC/ST population. The State also emphasised the importance of demographic performance, specifically the total fertility rate, and the State’s contribution to the total GDP.

 

Previous commissions have used the income distance criterion, which allows for a larger devolution. Madhya Pradesh proposed the following weightages: 10% for population, 10% for the state’s share in the SC/ST population, 5% for demographic performance (total fertility rate), 40% for income distance, 5% for the multidimensional poverty index, 10% for area, 15% for forest cover, 2.5% for tax collection and fiscal efforts, and 2.5% for the State’s contribution to the total GDP (excluding union territories) in tax devolution from the horizontal pool. Additionally, Panagariya mentioned that other states have also expressed a desire for a portion of the cess and surcharge currently being levied by the Central Government. Historically, cesses and surcharges collected by the Centre have not been mandated for sharing with the states, as the Constitution does not permit it, the Finance Commission Chairman explained.

 

The Chairman ducked questions on freebies offered by State and Central governments. Chief Minister Dr Mohan Yadav was called on by Dr Arvind Panagariya, Chairman of the 16th Finance Commission and other officials, who are on a visit to the State at the CM’s residence on Wednesday evening. After the deliberation with the State Government’s head, Arvind Panagariya said on Thursday that before making final recommendations, his team is on tour to all the 28 states. Madhya Pradesh is the 20th state. Only after completion of meetings with all stakeholders details pertaining to the approval of state government’s appeals and commission’s recommendations can be divulge in details.