The Chairman said that with the Planning Commission having been replaced by NITI Aayog, special category status no longer exists.
Published Apr 17, 2025 | 9:25 AM ⚊ Updated Apr 17, 2025 | 9:25 AM
Andhra Pradesh CM Chandrababu Naidu
Synopsis: 16th Finance Commission Chairman ruled out the prospect of granting special category status to Andhra Pradesh or any other state citing that the non-existence of Planning Commission. Chief Minister Chandrababu Naidu presented the needs of the state.
Chairman of the 16th Finance Commission Arvind Panagaria on Wednesday, 16 April, ruled out the prospect of granting special category status to Andhra Pradesh or any other state, stating that the issue is irrelevant since the Planning Commission, which previously designated such status, no longer exists.
Speaking to the media after Chief Minister N Chandrababu Naidu’s presentation on the state’s needs, Panagariya said that with the Planning Commission having been replaced by NITI Aayog, special category status is no longer considered for any state.
Panagariya said that Andhra Pradesh requested an increase in the share of the divisible pool of central taxes from 41 percent to 50 percent. The state also sought specific weightage in the tax devolution formula: five percent for population, five percent for geographical area, 15 percent for forest cover, 30 percent for income distance, and 20 percent for agriculture and allied sectors.
Income distance measures the economic gap between a state’s per capita income and that of the state with the highest per capita income, a key criterion for horizontal tax devolution. The 15th Finance Commission had assigned a 45 percent weightage to income distance.
Asked if Andhra Pradesh could expect any special assistance for the construction of its capital, Amaravati, Panagariya remained non-committal. He said Naidu had provided a detailed historical account of Amaravati, tracing its significance back to Emperor Ashoka in the 3rd century BCE, along with the current status of the capital’s development and its financial requirements.
Addressing other concerns, Panagariya said that Naidu had sought special consideration due to challenges following the state’s bifurcation, including legacy debt, reduced GSDP, and financial strain.
Naidu also raised concerns about the declining Total Fertility Rate (TFR) and its potential to skew demographic profiles, advocating for a higher population weightage in the devolution formula. Similar concerns were echoed by Tamil Nadu and Assam, and Panagariya assured that the Commission would consider these issues.
For the first time, the 16th Finance Commission has been given a “clean slate” by the Union government, with no specific parameters imposed in its Terms of Reference (ToR). Unlike the 15th Finance Commission, which was mandated to use the 2011 Census for tax devolution calculations, Panagariya clarified that no such conditions apply this time. He, however, did not specify which census data the 16 Finance Commission would use.
(Edited by Muhammed Fazil.)
