By TC News Desk
Agartala, 16th July 2026: A study prepared for the Sixteenth Finance Commission has recommended greater fiscal support for Tripura, arguing that the Tripura’s extensive forest cover, while contributing significantly to India’s ecological security, has also imposed structural constraints on infrastructure development and economic expansion.
The recommendation forms part of the study, “Evaluation of Finances of State of Tripura,” undertaken under the Sixteenth Finance Commission with funding from the Government of India. The study was led by Prof. Subhrabaran Das, Professor and Head of the Department of Economics at Tripura University, as Principal Investigator. Dr. Kiran Bhowmik served as the Research Associate, while Srijan Debnath worked as the Research Assistant. The research team also included Sekharan Das, Samar Das and Alimpiya Das as Supporting Research Assistants.
According to the report, more than 60 percent of Tripura’s geographical area is under forest cover, making the State one of the country’s important ecological regions. However, the combination of dense forests and undulating terrain limits cultivable land to about 27 percentof the total geographical area, while development projects involving roads, public infrastructure and other essential facilities often require statutory forest clearances from the Union Government.
The report notes that these regulatory requirements, though essential for environmental conservation, increase both the cost and the time required for executing development projects. As a result, Tripura faces constraints that differ substantially from those experienced by many other States. The study has suggested to increase the weight assigned to Forest and Ecology in the horizontal devolution formula from 10 percent under the Fifteenth Finance Commission to 20 percent. The researchers describe the move as an important recognition of the ecological services provided by forest-rich States.
“The enhanced weight assigned to Forest and Ecology reflects the growing importance of environmental sustainability in fiscal transfers. States that conserve forests perform a national ecological service and should receive adequate financial support to meet the opportunity costs associated with conservation,” the report states.
The researchers argue that a stronger emphasis on forest and ecological parameters would encourage States to improve forest conservation, biodiversity protection and carbon sequestration while promoting carbon credit initiatives and other measures supporting a green economy. Tripura, spread over 10,491.69 square kilometres and sharing an 856-kilometre international border with Bangladesh, possesses rich biodiversity and significant forest resources. The report observes that preserving these natural assets entails considerable expenditure on forest protection, environmental management and sustainable development.
It recommends that fiscal transfers adequately reflect these responsibilities so that forest-rich States are not placed at a developmental disadvantage. Greater central assistance, the study says, would enable Tripura to pursue infrastructure development and economic growth without compromising its environmental commitments. The report concludes that India’s transition towards a green GDP-based economy should be accompanied by a fiscal framework that rewards States for conserving forests and ecological resources, thereby ensuring that environmental stewardship and economic development advance together.
