India can grow only when states are given rightful share in taxes: TN CM Stalin

CHENNAI: Chief Minister MK Stalin on Monday expressed confidence that the 16th Finance Commission would address the historical injustices faced by Tamil Nadu due to the recommendations of the previous Finance Commissions.

Delivering the keynote address after meeting the 16th Finance Commission here on November 18, Stalin appreciated the 15th Finance Commission's recommendation to increase states' share of tax revenue to 41 per cent, but noted that the actual share has been only 33.16 per cent over the last four years due to increased minimum tax and surcharges.

Stressing on the need for a balanced approach in tax sharing, Stalin advocated for a 50 per cent share of tax distribution to states. This would enable states to implement development schemes and exercise financial autonomy, he said.

Tamil Nadu's tax share has declined from 7.831 per cent to 4.079 per cent between the 9th and 15th Finance Commissions, he pointed.

Stalin sought 50 per cent tax devolution to states for fair and equitable distribution, urged the commission to recommend adequate funds for immediate disaster relief and rehabilitation activities, and requested it to consider Tamil Nadu's growing ageing population and provision of necessary financial resources for social investments.

Stalin criticised the Centre's redistribution of funds, alleging that it hampered growth and reduced tax distribution to underdeveloped states.

States like Tamil Nadu, which has effective administrative systems, could contribute significantly to India's economic development through a revised financial distribution system, Stalin said, and emphasised the need for balanced growth and efficient governance in the tax sharing system during the 16th Finance Commission meeting.

Providing necessary funds to underdeveloped areas while supporting well-performing states was crucial for the country's overall development, opined the Tamil Nadu Chief Minister.

Stalin criticised the BJP-led NDA government at the Centre for reducing funds to well-performing states and diverting them to promising regions, ultimately affecting the country's growth and tax distribution to underdeveloped states.

He argued that artificial redistribution of funds would not yield expected benefits in the near future. Stalin also highlighted Tamil Nadu's potential to contribute significantly to India's economic development with a revised financial distribution system.

He emphasised that India can become an economic powerhouse by achieving development of each state to its full potential.

The 16th Finance Commission on Monday discussed various issues with the Chief Minister and other ministers and officials in Chennai on Monday.