Archive · 5 Jun 2025
States Want Higher Tax Revenue Share: Finance Commission
The Finance Commission is figuring out how to split the government's tax money between the central government and the states.
Many states want a bigger share, asking for 50% instead of the current 41%.
Arvind Panagariya, the chairman, has visited all states to discuss this.
The commission is considering these requests, but a significant change is unlikely.
They will make a final decision and submit a report by October 31, 2025, which will be implemented from 2026.
The 16th Finance Commission is considering tax revenue distribution between the Centre and states.
Most states have requested an increase in their share of tax revenue to 50%.
The current share of states from tax revenue is 41%.
The commission chairman is Arvind Panagariya.
The Finance Commission is expected to submit its report by October 31, 2025.
- Who
- Arvind Panagariya, Chairman of the 16th Finance Commission
- What
- The 16th Finance Commission discussed state tax revenue distribution.
- When
- The 16th Finance Commission is expected to submit its report by October 31, 2025; recommendations effective from 2026-2031.
- Where
- Lucknow, Uttar Pradesh
- Why
- The 16th Finance Commission is consulting with states to determine tax revenue distribution.
State Governments
Central Government
Tax Revenue Allocation
State Governments
Increase states' share to 50% of the tax revenue.
Central Government
Maintain current tax revenue sharing or a modest increase to states.
- Commission Formation
- December 31, 2023
- Report Submission Deadline
- October 31, 2025
- Report Period
- April 1, 2026 - March 31, 2031
- Current States' Share of Tax Revenue
- 41%
- States' Requested Share of Tax Revenue
- 50%
Sources
UP among best fiscally managed states despite low per capita income: Finance Commission chief
Majority of states seek 50% share in tax revenue from Centre: Finance Commission chief Arvind Panagariya
UP wants 50% share in tax revenue, says Fin panel chief
