Fri May 09 07:15:09 UTC 2025: **Maharashtra Seeks Increased Tax Revenue Share from 16th Finance Commission**

MUMBAI, INDIA (May 9, 2025) – The Maharashtra state government has requested a significant increase in its share of tax revenue from the 16th Finance Commission (FC). In a meeting with FC Chairman Dr. Arvind Panagariya, the state government proposed several key changes to the devolution formula.

Key demands include raising the weightage of population share in the devolution formula from 15% to 20%, and securing ₹1,28,231 crore for infrastructure development in the Mumbai Metropolitan Region (MMR). Proposed projects encompass river interlinking, upgrades to medical student hostels and prisons, a new Bombay High Court complex, and adjustments to the State Disaster Response Fund (SDRF) ratio from 75:25 (Centre:State) to 90:10. The state also seeks a rise in grant-in-aid for local bodies from 4.23% to 5%.

Furthermore, Maharashtra aims to increase its share of the divisible tax pool from 41% to 50%, aligning with requests from other states. The state also advocates for new horizontal devolution criteria, emphasizing sustainable development (22.5% weightage) and green energy (2.5% weightage), along with a revised ‘income distance’ metric and reduced ‘demographic performance’ weighting.

Dr. Panagariya praised Maharashtra’s fiscal management, noting its low fiscal deficit and responsible borrowing. The 16th FC is currently consulting with all Indian states to determine tax revenue distribution for the 2026-2031 period. The meeting was attended by Chief Minister Devendra Fadnavis, Deputy Chief Minister Ajit Pawar, and Eknath Shinde.

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