Himanta Biswa Sarma concerned over fall in tax share to states: Arvind Panagariya

The 16th Finance Commission (FC) Chairman Arvind Panagariya on Thursday said that Assam Chief Minister Himanta Biswa Sarma expressed concern over the "steady decline of tax devolution" for the state and sought arrest of the trend.

Panagariya held a meeting with Sarma, his cabinet colleagues and top government officials earlier in the day.

"The CM expressed concern that since the 13th FC, Assam has seen its share on devolution declining steadily. He said it's connected to lower taxes on petroleum products and liquor in neighbouring states," Panagariya said in a press conference.

Lower taxes in neighbouring states are compensated by the FC, leading to revenue loss to Assam, he said.

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"The Assam government suggested different criteria for devolution for different states. The 15th FC had devoluted 15 per cent of states' share. Assam has suggested reducing it to 10 per cent," he added.

The Panagariya-led 16th FC found "merit" in suggestions and requests by Assam over various monetary issues, he said.

The Finance Commission is set up by the President mainly to give its recommendations on the distribution of tax revenues between the Centre and the states and among the states.

The 16th FC arrived in Assam on Wednesday on a four-day tour.