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Dear All,

North Eastern States now get 7.94% of total tax devolution under 14th Finance Commission (FFC) award


Apart from estimated share in Central Taxes of Rs. 3,13,375 crore during 14th Finance Commission award period, the Commission has recommended grant-in-aid of Rs.63,206 crore for North Eastern States. For Revenue deficit grants, Rs. 51,137 crore has been recommended to 6 States assessed to be in deficit post devolution of central taxes, for local bodies Rs.8,866 crore and Central share to SDRF Rs.3,202 crore. As against share of 6.16% of total tax devolution during 13th FC award, NE States now get 7.94% of total tax devolution under FFC award. 

Share of central taxes have increased by 251%, grant-in-aid by about 44% and in overall there is an increase of 183% in untied resources transferred to eight North Eastern States under the recommendations of Finance Commission.

The transfer of Statutory Resources or untied fund flow to NE States in aggregate have gone up to Rs.54,385 crore in 2015-16, from Rs.30,072 crore in 2014-15, indicating an increase of 81%. The details are shown in the table below:

 
Source: PHD Research Bureau compiled from Ministry of Finance

Further, Government of India has provided Rs.1,000 crore as one time assistance for areas covered under Sixth Schedule in Assam, Meghalaya, Mizoram and Tripura.

 Source: PHD Research Bureau compiled from Ministry of Finance

So far an amount of Rs.32,657 crore (i.e.79%) as devolution of taxes, and Rs.11,433 crore (89%) as FFC grants have been released to these 8 North Eastern States. The States will get 3 more installments of ‘tax devolution’ during the month of March 2016 and balance of grant-in-aid recommended by FFC.

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