Odisha places Rs 12.59 lakh crore demand before 16th Finance Commission

Bhubaneswar, Feb 6 (PTI) The Odisha government on Thursday requested Rs 12.59 lakh crore from the 16th Finance Commission and sought an increase in the state’s share of the central divisible pool to 50 per cent from the current 41 per cent.

Chief Minister Mohan Charan Majhi made the request during a meeting with the Finance Commission team, led by Chairman Aravind Panagariya, emphasising that the demand was crucial for the state's development, particularly as it aims to become one of the country's developed states by 2036, marking its centenary.

Addressing a press conference, Panagariya said many states including Odisha have demanded increasing their share to 50 per cent from the central divisible pool. The 16th Finance Commission is mandated to submit its report with the President of India in October 2025 and make its recommendation after visiting 28 states and taking views of all the stakeholders.

"The commission has visited several states and held consultations. Maximum states demanded an increase in the share in the central pool to 50 per cent. Only one or two states have demanded a 45 per cent rise," Panagariya said.

He mentioned that some states also wanted a portion of the cess and surcharge being imposed by the Centre. The divisible pool is that portion of gross tax revenue which is distributed between the Centre and the states while surcharges and cess are not part of the pool, he clarified.

He also said the Odisha government is also in favour of making cess and surcharges collected by the Union government a part of the divisible pool for distribution among the states.

On the demand for Special Category status for the natural calamity-prone Odisha, he said the subject does not come under the purview of the Finance Commission. He said, earlier, the Planning Commission used to provide such status but after NITI Aayog was formed, no state has got the tag.

"The central government impose cess and surcharges and 100 per cent of those funds directly go to the budget of the Centre. But, the Odisha government demanded that the cess and surcharges be brought to the divisible pool so that states can also get a share," he added.

The Odisha government has also raised its demand for revising the weightage fixed under different criteria while distributing the divisible pool funds among the states, he said.

Stating that the Odisha government demanded Rs 12,59,148 crore for the state during the next five years from 2026 to 2031, Majhi gave a breakup of the demand amount and said the state sought Rs 9,88,422 crore as the pre-devolution revenue deficit, Rs 1,10,434 crore towards state specific bodies, Rs 1,00,036 crore towards grant to local bodies, Rs 31,004 crore for SDRF and Rs 29,252 crore towards State Disaster Mitigation Fund.

Majhi said the state also asked the Finance Commission to make provision of 100 per cent grant under the State Disaster Response Fund (SDRF) from the Centre and to increase the state's share in central tax from 4.528 per cent to 4.964 per cent.

He said the Centre contributes 75 per cent of the SDRF while the state takes the burden of remaining 25 per cent. However, this time, Odisha has demanded 100 per cent grant for SDRF as the state is disaster prone and often affected due to cyclones, floods and other such calamities, he said.

Majhi also demanded a fixed 2 per cent share of the Centre's revenue for urban local bodies and Panchayati Raj institutions.

Meanwhile, in a memorandum to the 16th Finance Commission, Opposition BJD president and former chief minister Naveen Patnaik said, "Due to the perpetual neglect by successive governments at the Centre, Odisha has not been provided its rightful share in central divisible pool of taxes compared to the revenue collected from the state." A delegation of ruling BJP also submitted a memorandum with the 16th Finance Commission and pointed out that though the state is rich in mineral resources, it has the lowest per capita income among the large states.

The party said the state’s share should be increased to 50 per cent and it should get a portion of the cess and surcharge being collected by the Union government.

"More emphasis should be given to the financial chain, the population of Scheduled Castes and Scheduled Tribes, and forest areas should be looked into while making recommendation for the state," the BJP memorandum told the Finance Commission.

"A special package should be announced for tourism development. Special grants should be made for irrigation, productivity and climate-resilient agriculture. Special attention should be paid to the social and economic upliftment of the PVTG category, grant for skill development and vocational education should be increased," the BJP said.

Representatives from different PRIs, ULBs, trade unions, industries association and political parties also met the Finance Commission and placed their demands. PTI BBM AAM RG NN AAM MNB

Source: PTI