Finance panel to discuss tax sharing issue with Odisha

The members of 14th Finance Commission, headed by Y V Reddy, arrived in the state today to discuss allocation of funds from the Central pool to the Odisha government during the five year period starting 2015.

Apart from Reddy, the five member team visiting the state comprised Abhijit Sen, Sushma Nath, M Govinda Rao and Sudipta Mundle.

"The Commission has arrived here and will hold talks with the state government officials regarding revenue sharing tomorrow. They have prepared a memorandum regarding this," said Sen, a senior panel member.

The state government said, it is ready with its list of demands to be presented before the Commission.

"We will lay down the memorandum we have prepared mentioning the needs and necessity of the state. We will hold a comprehensive discussion with the team on this matter," said Upendra Behera, state finance secretary.

The memorandum was approved by the state cabinet in the meeting held on 27 November.

During the current (13th) Finance Commission, Odisha was entitled to receive Rs 78,975 crore as its share from the Central pool while in the tenure of the 12th Commission, it got Rs 36,942 crore between 2005 and 2010.Though the amount approved by 13th Commission was higher than the previous panel, percentage wise, the share of the state in the total disbursement by the Centre was highest in the 2005-2010 period at 4.89 per cent compared with just 4.6 per cent of total sharing in 2010-2015 period.

This time, the state government wants to demand nearly Rs 100,000 crore as its share from the Central revenue pool. Besides, demands for additional grants to deal with natural calamities will also be made, said a state official.

"The amount awarded by the 13th Commission was lower compared to previous amount percentage wise. We will demand for more during this time. We are a natural calamity prone state. So, we will make a case for higher allocation to the state to deal with these issues," said Prasanna Acharya, the state finance minister.

As per the article 280 of the Constitution, the Commission is appointed every five years and consists of a chairman and four other members. It was formed in 1951 to define the financial relations between the Centre and the state. It currently looks after the revenue sharing model of the Centre with each state government.