Assam: Decline in distribution of tax revenues from Centre worries CM Himanta

16th Finance Commission visits Assam

Staff Reporter

Guwahati: Assam chief minister Himanta Biswa Sarma is concerned at the declining trend in devolution from the Centre since the 13th Finance Commission. So, the CM suggested some different criteria for the devolution across states from the ones that have been used in the past by the earlier Finance Commissions. He also stated that the funds allocated to the state for the fight against floods are not enough for rebuilding and reconstruction work.

Chairman of the 16th Finance Commission, Dr. Arvind Panagariya, accompanied by other members of the Commission, is on a visit to Assam, and he held a meeting with the CM, some of his cabinet colleagues, chief secretary Assam, top officials of the Finance Department, and senior officials of the state government on Thursday. During the discussion, the state government placed a plea before the Finance Commission on financial support from the central government.

The 16th Finance Commission was formed last year by the government of India. The 16th Finance Commission was necessitated as the recommendations of the 15th Finance Commission are valid for the financial year 2025-26 only. The Commission is required to make its report available by October 31, 2025, covering a period of five years commencing on April 1, 2026.

After the meeting with the CM and senior bureaucrats, Dr. Arvind Panagariya told the media in a press conference, "A long meeting was held with the chief minister, chief secretary, and senior officials of the Assam government. During the meeting, the CM made a substantial speech, and a detailed presentation was made by the secretary of the Finance Department. The presentation comprised three parts: Assam's history and geography, development in the health and education sector, finances of Assam, and the devolution part."

Financial devolution refers to the transfer of financial resources and decision-making powers from the central government to the states.

Pangariya further stated, "During the discussion, the chief minister expressed his concern over the declining devolution to Assam since the 13th Finance Commission. The Chief Minister was in particular concerned that the state of Assam, over the periods of different Finance Commissions, since the 13th Finance Commission had seen its share in the devolution decline steadily. And he focused quite a bit on that and he also felt that, in part, this was happening because this was connected to some of the revenue losses Assam was having because of lower tax rates on excise, both liquor and petroleum products, in the neighbouring states and his view was that, because the neighbouring states were not collecting enough revenues of their own, the Finance Commissions were compensating for that. And that, in turn, was resulting, therefore, in the decline in the share for Assam."

So, the CM made a strong pitch that this needed to be reversed and that Assam is the largest state in the Northeast, both by area and population And that, in the end, Assam is the growth engine of the Northeast and, ultimately, if Assam doesn't do well, other states will also not do well and, therefore, Assam needs to be strengthened. So alternatively, some different criteria was suggested for the devolution across states from the ones that have been used in the past by the earlier Finance Commissions.

Highlighting Assam's developmental strides, the CM underscored how Assam has experienced a substantial uplift in its law and order situation, a critical factor that has attracted increasing investments into the state. He highlighted the significant rise in Assam's GDP and per capita income, stating that Assam is poised to shift from being a dependent state to becoming a vital contributor to India's economic engine.

On a question from the media that Assam is a flood-prone state and whether any special requests have been made, Pangariya replied that, "During the meeting, state government officials mentioned the flood issue, and the CM's speech contained references to the flood issue. It was stated that floods in Assam occur on an annual basis and lots of damage occurs. The funds received in terms of flood relief are not enough for rebuilding and reconstruction work."

On Thursday afternoon, the Finance Commission held meetings with many stakeholders, like trade and industries, rural local bodies, urban local bodies, autonomous councils, and political parties.

The Finance Commission team arrived in Assam on Wednesday, and on Friday they will pay a visit to Dimoria Block, Khetri Gaon Panchayat, and the site for the Tata Semiconductor plant at Jagiroad. In the afternoon, they will arrive at Kaziranga, where they are scheduled to stay the night. On the morning of September 28, they will visit KNP and will interact with field-level workers. From Kaziranga, they are scheduled to make their way to Meghalaya later in the day.

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