Tripura seeks higher tax share, new criteria in 16th Finance Commission proposal

The Tripura Government has suggested that the 16th Finance Commission incorporate the Infrastructure Index with 5% weightage and the International Border with 5% weightage as additional criteria in revenue distribution, in addition to raising the state’s tax share from 42% upto 50%.  

Addressing a press conference this afternoon, Chairman of CFC-XVI Arvind Panagariya said that Tripura is the 17th state the commission has visited and that they have also consulted with previous Finance Commissions.  

“Our mandate will end on October 31, 2025, and we have to submit our report to the President. Today, we had a very detailed meeting with the Government of Tripura in the presence of Chief Minister Dr. Manik Saha, Finance Minister Pranajit Singha Roy, along with other Cabinet ministers and Tripura government officials, where we had detailed presentations,” he said.  

He stated that the award period of the 15th Finance Commission is from 2021 to 2026.  

“Usually, it is five years, but due to COVID, it became six years. The horizontal devolution that the 15th Finance Commission recommended and the suggestions given by the Government of Tripura for the 16th Finance Commission were discussed,” he told reporters.  

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He said that during the meeting, the state government proposed modifications to the weightages used by the Fifteenth Finance Commission (CFC-XV) in revenue distribution among the states.  

“The Tripura Government suggested incorporating the Infrastructure Index with 5% weightage and the International Border with 5% weightage as additional criteria in revenue distribution. Based on population, the 15th Finance Commission said that 15% of the state share should be devised based on that. The Tripura government proposed reducing the weightage for the Population from 15% to 10%, reducing the weightage for Area from 15% to 5%, increasing the weightage for Forest & Ecology from 10% to 20%, raising the Income Distance from 45% to 50%, and reducing the weightage for the Demographic Rate from 12.5% to 5%,” he said.  

He further stated that most of the states they have visited, except for one or two, have asked to increase the state share from 42% to 50%.  

“Tripura’s recommendation is also to raise the state’s tax share from 42% to 50%. Some states have asked for 45%, but the rest have requested 50%,” he added.