Kerala Hosts Opposition Ruled States Finance Ministers’ Meet Today

A one-day conclave of finance ministers from five opposition-ruled states will be held here today, Thursday, to discuss issues related to the 16th Finance Commission.

Kerala Chief Minister Pinarayi Vijayan inaugurated the event, with the state Finance Minister KN Balagopal presiding.

Telangana Deputy Chief Minister and Finance Minister Bhatti Vikramarka Mallu, Karnataka Revenue Minister Krishna Byre Gowda, Punjab Finance Minister Harpal Singh Cheema, and Tamil Nadu Finance Minister Thangam Thennarasu will participate in the conclave.

There will be detailed discussions about the different aspects of the finance commission in this conclave.

“There will be a very detailed discussion about the different aspects of the finance commission, how the states are representing them, and what the major issues are for considering,” the Kerala finance minister KN Balagopal had said earlier.

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He had asserted that this will be one of the important events in recent days because the 16th Finance Commission will be going to complete the meetings and prepare the reports next year.

“States have different opinions about the important issues. This is very important for the health of fiscal federalism,” he added.

Notably, the 16th Finance Commission was constituted by the President on 31st December 2023 with Arvind Panagariya as Chairman. The commission has already started consultations and discussions to get the feed and to discuss the memorandum of the states. The chairman and members are visiting the states, and the commission will be visiting Kerala in the month of December
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The Finance Commission has been constituted to make recommendations covering a period of five years commencing on April 1, 2026. Additionally, the commission is also mandated to review the present arrangements for financing disaster management initiatives, with reference to the funds constituted under the Disaster Management Act, 2005 (53 of 2005), and make appropriate recommendations thereon.

According to the 15th Finance Commission’s recommendations, the centre should allocate 41 per cent of tax collection to states. This is known as vertical devolution.

The distribution among states, or horizontal devolution, is based on several criteria like demographic performance, income, population, area, forest and ecology, tax, and measures to check fiscal deficits by individual states.

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