Panaji: The Goa govt has placed a request for Rs 32,746 crore from the Centre's divisible tax revenue pool, including special state-specific grants for 13 projects, according to Dr Arvind Panagariya, Chairman of the Finance Commission.
Panagariya elaborated on the Commission’s mandate, emphasizing that its primary role is to ensure a fair and efficient division of the nation’s tax revenues between the Centre and the states. He explained the concepts of vertical and horizontal devolution, detailing how the tax revenues are distributed and the criteria used for this division.
Goa has proposed increasing the State's share of the divisible pool from the current 41% to 50%, aligning with the recommendations of several other states. Additionally, Goa has suggested revising the criteria for horizontal devolution, particularly advocating for a reduction in the income distance parameter from 45% to 30%. This adjustment, Goa argues, would better reflect the state's economic needs and contributions.
"We have also recommended a new criterion focused on Sustainable Development Goals (SDGs), suggesting that 12.5% of the divisible pool be allocated based on SDG achievements," Panagariya highlighted.
Addressing concerns about the potential misuse of funds for social welfare schemes or freebies, Panagariya clarified, "If money is given for a project, it must be used for that project. The Finance Commission can only make recommendations; it does not control state spending decisions."
He also noted that the Commission's recommendations are subject to acceptance by the central government, with compliance monitored by the Comptroller and Auditor General (CAG).
The Commission, currently midway through its consultations with various states, will continue its deliberations before finalizing its recommendations. "We have visited 15 states and will consider inputs from the remaining ones before making our decisions," Panagariya concluded
