Daijiworld Media Network - Mumbai
Mumbai, May 8: Maharashtra has made a forceful case for a larger slice of the central tax pie, urging the 16th Finance Commission to increase the state's share in the divisible pool from 41% to 50%. The state also called for merging cesses and surcharges into principal taxes and including non-tax revenue in the divisible pool to ensure fairer distribution of central resources.
Led by Chief Minister Devendra Fadnavis, with Deputy Chief Ministers Eknath Shinde and Ajit Pawar in tow, Maharashtra’s top brass pressed their case before Commission Chair Arvind Panagariya and his team. The state is also seeking special assistance worth Rs 1.28 lakh crore to drive infrastructure growth and support its goal of becoming a $1 trillion economy by 2030.
Echoing the demands of other high-performing states like Gujarat, Karnataka, and Tamil Nadu, Maharashtra argued that fiscally sound and growth-driven states should receive a more generous share of national revenue to accelerate development that benefits the entire country.
Currently, Maharashtra receives 6.31% of the 41% tax devolution to states. The state estimates ?89,726 crore in transfers for FY 2025-26 and expects annual allocations of ?1.2 lakh crore between 2025 and 2030.
Panagariya acknowledged the legitimacy of the state's demands and noted Maharashtra’s disciplined fiscal management, including a lower-than-average tax-to-GDP ratio and a fiscal deficit below 3% of GSDP.
As part of its recommendations for revenue-sharing criteria, the state proposed weightages of 10% each for rural and urban population (based on the 2011 Census), 15% for area, and 10% for forest and ecology. A new parameter — sustainable development and green energy — was introduced with a 2.5% weight. Maharashtra also sought a reduction in the weightage for income distance from 45% to 37.5%.
The Rs 1.28 lakh crore aid request includes Rs 1.17 lakh crore for major development efforts: Rs 50,000 crore for the Mumbai Metropolitan Region Economic Master Plan and Rs 67,051 crore for river-linking projects. The state has also sought Rs 11,180 crore in special grants for projects including a new Bombay High Court complex, prison upgrades, postgraduate medical education, and ecotourism in Vidarbha.
The state’s memorandum emphasized the importance of empowering states that can accelerate national growth, arguing that higher allocations to well-performing states will ultimately benefit all, including less developed regions.
With mega projects like the Mumbai Trans Harbour Link, Samruddhi Mahamarg, and Navi Mumbai International Airport nearing completion, and others like the Pune Ring Road and Vadhavan Port in the pipeline, Maharashtra believes it is at a transformative moment.
Backing its appeal with data and vision, the government asserted that Finance Commission support is vital not only for the state’s ambitions but also for India’s larger goal of becoming a developed nation by 2047.