BY TC News Desk
Agartala, 30th January 2025: The Tripura Government has strongly advocated for a revised revenue-sharing model, urging the 16th Finance Commission to increase the state’s share of tax devolution from the existing 42% to 50%. Additionally, the state has proposed the inclusion of new criteria—Infrastructure Index and International Border, each carrying a 5% weightage—in determining fund allocation.
During a press conference, Arvind Panagariya, Chairman of the 16th Finance Commission, confirmed these proposals while discussing the commission’s deliberations in Tripura.
“Tripura marks the 17th state we have visited. Our mandate concludes on October 31, 2025, and we are required to submit our report to the President. We had a comprehensive discussion with Chief Minister Dr. Manik Saha, Finance Minister Pranajit Singha Roy, Cabinet ministers, and senior state government officials, wherein Tripura presented its financial demands,” Panagariya stated.
Acknowledging the impact of COVID-19 on the Finance Commission’s cycle, he explained that the 15th Finance Commission’s award period was extended from five years to six, covering the period from 2021 to 2026. The 16th Finance Commission is now assessing states’ demands for modifications in the revenue-sharing formula.
Tripura has called for an adjustment in weightages assigned to various parameters in revenue distribution. The state’s proposals include Reducing Population weightage from 15% to 10%, Cutting Area weightage from 15% to 5%, Increasing Forest & Ecology weightage from 10% to 20%, Raising Income Distance weightage from 45% to 50%, Reducing Demographic Rate weightage from 12.5% to 5%
The state has also stressed its geographical constraints, particularly its extensive international border with Bangladesh, as a critical factor that should be considered in central fund allocations.
Tripura’s demand for a higher tax devolution aligns with a broader national trend. “Except for one or two states, most have requested an increase in tax devolution to 50%. Some states have sought a 45% share, but the majority—including Tripura—are advocating for a 50% allocation,” Panagariya noted.
