Dehradun: The team of the 16th Finance Commission held an important meeting with the state government officials during its visit to Uttarakhand. In the meeting led by the Chairman of the Commission, Dr. Arvind Panagariya, issues related to tax distribution, state revenue demand and development were discussed.
Dr. Panagariya said that in the tax system, the central government collects income tax, corporate tax, cess and surcharge, while SGST, sales tax on petrol and excise tax are received by the state government. The central government distributes a part of these taxes to the states, for which the Finance Commission is constituted every five years.
Communication with Panchayats and Municipal Bodies
The commission said that it is visiting all the states and communicating with the governments, panchayats and municipal bodies. In the meeting with CM Dhami and the state finance secretary, the state put forth its demands in detail. The state government has specifically demanded 10% share of central cess (cess and surcharge) for Uttarakhand. The Finance Secretary also told the Commission that the 15th Finance Commission had given 41% share to Uttarakhand, while 15% budget was distributed among the states on the basis of population.
Dr. Panagariya also said that tax collection is affected on the basis of per capita income. Haryana’s per capita income is the highest in the country. The Commission has also fixed 15% share according to area, while an additional provision of 2.5% has been made according to the revenue collection capacity of the state.
