AGARTALA, Jan 30: The Chairman of the 16th Finance Commission, Arvind Panagariya, assured that the panel’s recommendations would take into account the socio-economic and geographical realities of the northeastern states. During a media briefing in Agartala on Thursday, Panagariya revealed that the Commission would ensure that the unique challenges faced by the region are considered while formulating recommendations.

Panagariya acknowledged that the northeastern states, like other states in India, have called for an increase in tax devolution from the Centre, with Tripura specifically requesting a 50% increase. Currently, the tax devolution ratio stands at 59% for the Union government and 41% for the 28 states of India, as per the 15th Finance Commission.

“Tripura is the 17th state we are visiting. The Commission has already engaged with the states and heard their demands. However, we are yet to visit Mizoram and Arunachal Pradesh out of the eight northeastern states,” he said.

The Finance Commission Chairman expressed his appreciation for the region’s impressive forest cover and pointed out that due to the hilly nature of the region, infrastructure building and transportation costs are inherently higher, a challenge faced by other mountainous states as well.

Regarding the Centrally Sponsored Schemes (CSS), Panagariya noted that northeastern states receive a more favorable funding pattern, with 90% of the total expenditure covered by the Union government and only 10% by the respective state. This is in contrast to the 60:40 ratio for other states.

The Commission aims to present its recommendations by October 2025, based on the population ratio. The Chairman also touched on the economic situation in Tripura, noting that the state’s economy is well managed, with finances in a sound position. He highlighted that Tripura’s debt and committed expenditure have been on the decline, a positive trend for the state’s financial health.

“Tripura’s dependency on agriculture is lower than the national average, which stands at 45%. The state’s rate of urbanization is increasing rapidly, and while its per capita income and social services remain below the national average, Tripura is making efforts to bridge the gap,” Panagariya stated.

The Finance Commission also held a meeting with Tripura Chief Minister Manik Saha, Chief Secretary J K Sinha, Finance Secretary Apurba Roy, and senior officials from various departments. Following the meeting, Saha emphasized that discussions focused on sustainable growth, infrastructure enhancement, and addressing the region’s unique challenges. He expressed confidence that the collaboration would lead to a brighter future for Tripura.

The Finance Commission delegation also engaged with Panchayat Raj institutions, urban local bodies, representatives of the Tripura Tribal Autonomous District Council (TTAADC), and leaders from political parties and trade bodies.

The delegation visited key tourist destinations such as Gomati, Sepahijala, and West Tripura districts to gain better insights into the region.

The 16th Finance Commission, which was constituted on December 31, 2023, is chaired by Arvind Panagariya, former Vice-Chairman of NITI Aayog. The other full-time members include Ajay Narayan Jha, Annie George Mathew, Manoj Panda, and Soumya Kanti Ghosh. The panel’s recommendations are expected to be released by October 31, 2025, covering a five-year award period starting from April 1, 2026.