Punjab News: Punjab Finance Minister Harpal Singh Cheema Calls for Enhanced Vertical Devolution at 16th Finance Commission Conclave

Punjab News: Punjab Finance Minister Harpal Singh Cheema, during his address at the 16th Finance Commission Conclave in Thiruvananthapuram on Thursday, demanded a substantial increase in vertical devolution from the current 41% of the divisible pool to a significantly higher share. Cheema also called for the inclusion of cesses, surcharges, and select non-tax revenues in the divisible pool to ensure a more equitable distribution of resources between the Centre and the states.

The conclave, focused on Centre-state financial relations, gathered finance ministers from across the country to share their concerns and form a united front to secure a fair share from the 16th Finance Commission.

Nuanced Formula for Resource Allocation

Cheema urged the Finance Commission to develop a nuanced formula that considers a state's developmental performance when allocating resources, while also providing targeted support to underperforming states. This approach, he argued, would promote more inclusive and balanced growth across the country.

Concerns Over GST and Fiscal Autonomy

Highlighting the disparity between social and developmental expenditures, Cheema expressed concern over the constrained fiscal autonomy states face under the Goods and Services Tax (GST) regime. He emphasized the need for reforms to the Fiscal Responsibility and Budget Management (FRBM) Act to make it more inclusive, which was discussed during the meeting with the Finance Commission.

Cheema’s remarks reflect Punjab’s push for greater financial autonomy and a more balanced fiscal relationship between the Centre and the states.

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