The Bengal government wants the 16th Finance Commission to raise the share of states in central taxes to 50 per cent from 41 per cent.

The state government has urged the finance commission to tweak the criteria for devolution, including changes in weightage, and introduce urbanisation as a factor.

The members of the 16th Finance Commission, chaired by former Niti Aaayog vice-chairman Arvind Panagariya, came to the city on Tuesday as part of a country-wide tour to ascertain the share of states from the central pool for five years starting April 1, 2026. The commission is expected to submit its report by October 2025.

“For the vertical devolution, in the 15th finance commission, the share of states was fixed at 41 per cent and the Bengal government’s plea is to increase it to 50 per cent. This is a figure which we have heard in majority of the states except one or two who have asked for slightly smaller share at 45 per cent,” Panagariya said following the meeting with the Bengal government and political parties.

The 15th finance commission had used criteria such as income distance, area, population, demographic performance, forest and ecology, tax and fiscal efforts to distribute taxes.

The state has urged the panel to increase the weight of income distance — the distance of a state’s income from the state with the highest income — to 50 per cent from 45 per cent. This will allow relatively low income states to get a higher share of devolution.

The state government has also said that population should have a weight of 10 per cent, and adjusted for SC and ST population. The divisible pool for area should be adjusted for locational complexities.

While demographic performance should have a weight of 20 per cent, tax efficiency should have a weight of 2.5 per cent.

“The 15th Finance Commission had used forest as one of the criteria but Bengal government said that it should not be one of the criteria. It has said that urbanisation should be introduced as another criterion with a weight of 7.5 per cent,” Panagariya said.

At the meeting, Bengal chief minister Mamata Banerjee has highlighted the difficulties faced in getting support from the Union government for funds from the centrally sponsored schemes.

“She drew attention to a number of pressing needs of the state, such as an overall special financial package, long overdue aid for natural calamities, release of at least some parts of the ₹1.8 lakh crore in central dues to Bengal, and a financial package to combat erosion and landslides,” a Trinamool source said.

Panagariya said the commission has noted the observations of the state government.

“Some of the areas were not necessarily under the finance commission’s mandate especially about the centrally sponsored schemes and the difficulties faced by the state government. This is an issue the CM wanted the commission to be sensitive to,” he said.

The BJP and CPM have also called for greater devolution in their meetings.

“Given the growing regional imbalance, we urge the commission to emphasise on devolution of more funds under the head grants in aid to states/union territories so as to uplift the group of states with lower SGDP and sliding proportional share of primary and secondary sectors,” said the CPM.