Chief ministers and top officials from several northeastern states have urged the Finance Commission to increase their share in federal taxes by 25%. The appeal was made during a crucial meeting in New Delhi on Monday.
Delegation Meets Finance Panel Chief
A high-powered delegation led by Meghalaya Chief Minister Conrad Sangma met Finance Commission Chairman Arvind Panagariya. The team included Mizoram Chief Minister P Lalduhoma, Tripura Finance Minister Pranajit Singha Roy, and senior representatives from the Sikkim government.
During the meeting, the leaders highlighted the region’s developmental challenges and geographical disadvantages. They stressed the need for greater financial support to meet local needs and bridge the infrastructure gap with mainland India.
What the Leaders Said
CM Sangma, speaking to reporters after the meeting, said:
“We have collectively requested that the northeastern states’ share in the divisible pool of taxes be increased from the current allocation. A 25% share is essential to meet the growing developmental needs of our region.”
Sangma noted that northeastern states face recurring natural disasters, poor connectivity, and high transportation costs. These factors raise project costs and delay timelines.
Mizoram CM Lalduhoma added that health and education outcomes lag behind national averages in many northeastern districts.
“We require tailored financial interventions,” he said, “not a one-size-fits-all approach.”
Key Issues Raised
The delegation submitted a detailed memorandum. Key points included:
- Poor road, rail, and digital connectivity in many areas
- Difficult terrain and high cost of delivering public services
- Limited private investment due to perceived risks
- Low internal revenue generation potential
- Climate vulnerability and frequent natural calamities
They also sought special incentives for green energy, border trade, and climate-resilient farming.
Support for the Demand
The move has received support from several regional think tanks and economists who believe the central tax devolution formula should account for geographical isolation and infrastructure lag.
Prof. Anurag Singh, a public finance expert from NEHU, said:
“States in the Northeast contribute to national security and biodiversity. They deserve a larger share to sustain their unique developmental models.”
Why This Matters
The 15th Finance Commission had already provided increased flexibility to the region through performance-based grants. But leaders argue this is not enough.
The northeastern region consists of eight states that represent about 3.7% of India’s population but play a vital role in geopolitics and ecology.
Tripura Finance Minister Pranajit Singha Roy said:
“Despite central schemes, our fiscal gap is growing. Only a larger tax share can help us remain competitive and ensure inclusive growth.”
What’s Next?
The Finance Commission is currently holding consultations with all Indian states to decide the tax devolution formula for 2026–2031. The recommendations will be submitted to the President in 2026.
Sources in the commission said the demands would be studied carefully. A commission official told indianexpress.com:
“We appreciate the concerns of northeastern states. Their issues are unique, and solutions will be tailored accordingly.”
Call to Action:
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