Gangtok, January 20 (IPR):
The members of the 16th Finance Commission of India interacted with the Sikkimese Media in a press briefing at the Central Hall of Chintan Bhawan, this afternoon.
The Press Conference was presided by Dr Arvind Panagariya, Chairman of the 16th Financial Commission of India.
At the outset, the Chairman outlined the jurisdiction and mandate of the Finance Commission. The important jurisdictions include-
1. Vertical Devolution: To recommend the share of taxes, duties, and grants-in-aid to be devolved to the states from the Centre.
2. Horizontal Devolution: To recommend the allocation of funds to each state based on their population, area, and other relevant factors.
3. Local Government Grants: To recommend grants to local governments, such as panchayats and municipalities.
4. Disaster Relief: To recommend funds for disaster relief and rehabilitation.
5. Defence and Security: To examine the impact of defence and security expenditures on the finances of the Centre and states.
6. Fiscal Consolidation: To recommend measures for fiscal consolidation and debt reduction.
The Chairman elaborated on the duty of the Finance Commission which is to understand and segregate the “divisible pool” wherein the commission decides how much finance goes to the States and what percent goes to the Centre.
The Chairman in his briefing stated that the Commission has been visiting several states, consulting with stakeholders, chairman of the past four commissions, experts, and ministers of states. Based on these consultation processes, a final report will be published in October 2025, which shall be submitted to the President of India . He also explained that the work of the 16th Finance Commission will come to effect from 2026/27 to 2030/31.
He informed that as per the 15th Financial Commission, 41% of the divisible pool have gone to the states and 59% to the centre. Criteria such as states’ share in national population, states’ share in national total area and income distance will affect where finances will be pooled from the 41%.
The Chairman also gave a recap of the day's events wherein the Commission met with the Chief Minister of Sikkim and state governmentfunctionaries, urban local bodies, rural local bodies, stakeholders, trade and industries, and representatives of political parties. He expanded on Sikkim’s recommendation to the Commission which is as follows-
- For the divisible pool to be increased from 41% to 50% which is a shared sentiment of all the other states.
- In accordance to the criteria of population, for the percentage to be increased from 15% to 20%.
- In accordance to the criteria of area, for the percentage to be increased from 15% to 20%
- In accordance to Income distance, Sikkim recommended that the divisible pool of 45% should be reduced to 25%.
- Sikkim also recommended a new separate criteria for GDP stating that 10% should be allocated to states that contribute more to national GDP.
- In accordance to the criteria of forest cover, for the percentage to be increased from 10% to 20%.
- Sikkim also recommended a 2nd new criteria for “sustainable development goals” stating that 5% should be allocated.
The Chairman articulated that until the 15th Finance Commission, Sikkim received 0.388% of the total divisible pool. He further elaborated that with these new recommendations, stakeholders predict that Sikkim will be able to achieve 0.72%.
The Chairman stated that one of the most pertinent issues brought up by almost all the stakeholders was the issue of connectivity in Sikkim.
The meeting concluded with a question and answer round with the press fraternity wherein the Commission took questions from Mr Bishnu Neopaney from Online Khabar Patrika, Mr Bijoy Gurung News Editor Sikkim Express, Mr Sujal Pradhan from NE India Today and Mr Prakash Adhikari from North East TV.
The Press Conference was moderated by Ms Annapurna Alley, Secretary Information and Public Relations Department, Government of Sikkim.