Southern states urge 16th FC to address cess and surcharge impact

Finance Commissions use different yardsticks to recommend transfer of funds from the Centre to the states. These generally are income distance, population, area, etc

As the 16th Finance Commission, headed by Arvind Panagariya, takes feedback from stakeholders, some states have complained to it that the Centre is increasingly taking recourse to cess and surcharge to circumvent its recommendations on tax devolution. Southern states have again raised the issue of giving more weight to the criterion of population control in deciding the transfer of central taxes to the states or else revert the population yardstick to the 1971 Census against the 2011 one considered by the 15th Finance Commission.

 

The southern states also wanted to reduce the weight given to the income distance criterion and,