Advocating for a forward-looking approach during 16th Finance Commission meeting, Haryana Chief Minister Nayab Singh Saini on Monday suggested the introduction of a new criterion that considers the percentage of a state's area within the NCR for resource allocation. Additionally, he proposed that the Finance Commission may introduce a new criterion based on the percentage of a State's population serving in the country's armed forces and recommend allocating a corresponding share of central taxes to such state governments to honour and strengthen national security efforts.

These demands were made by the State team led by Chief Minister Saini during its deliberations with the 16th Finance Commission headed by Dr Arvind Panagariya here in Chandigarh. In the meeting, detailed discussions were held regarding financial matters like tax devolution, resource allocation, and state-specific grants. The net proceeds of taxes collected by the Centre are distributed between the Union and the states through vertical distribution on the basis of recommendations made by the Finance Commission which is constituted every five years for this purpose.  

Saini said that most Finance Commissions have recommended grants to states based on various criteria. However, he believes that some states go beyond Centrally Sponsored Schemes, covering more beneficiaries or providing greater assistance to the poor from their own funds. Therefore, the 16th Finance Commission may recommend special State-Specific Grants for such states, he suggested.

He said that Haryana has ensured the procurement of all 24 crops at MSP. This has provided the State farmers with economic security and stability. The Commission may also consider recommending a State-Specific Grant for states ensuring such MSP-based procurement. He urged the Commission for inclusion of women’s reservation and educational qualifications for members as parameters in the norms of grants to local bodies in their recommendations for the year 2026-31.

The Commission Chairman Dr Arvind Panagariya praised Haryana for boasting the second-highest per capita income among major states despite being  a small state. “It is really commendable to see that in terms of geographical area though Haryana is small, its contribution in the country's economy is large and pivotal,” he added.   He outlined that the Commission has been extensively consulting stakeholders across the country. Haryana is the 24th state visited, with the consultations scheduled to conclude by early June 2025. The Commission’s final report is to be submitted by October 31.

Addressing media persons, Dr Panagariya said that Haryana Government made a detailed presentation, with the Chief Secretary-cum-Finance Secretary, supported by other senior officials, outlining the state's economic progress since its formation and highlighting key social and financial indicators. A major emphasis of the presentation was Haryana’s long-standing concern that it has received less than its due share in the devolution of central tax revenues over the years. Haryana has made a strong case, Dr. Panagariya remarked, adding that the State of Haryana has presented its arguments very well. Dr Panagariya explained that the Finance Commission’s primary role is to recommend the division of the Union’s tax revenues between the Centre and the states (vertical devolution), and further among the states (horizontal devolution), besides grants for local bodies and disaster relief.

Political Leaders urge 16th Finance Commission to provide special package for Hry

Considering Haryana’s geographical location, proximity to Delhi and industrial activities, Political leaders across party lines on Monday urged the 16th Finance Commission to provide a special package for the State. These demands were made by the leaders of Bharatiya Janata Party and Congress during its deliberations with the 16th Finance Commission headed by Dr Arvind Panagariya. During the meeting, the leaders discussed the geographical, social, and economic characteristics of the state and leaders presented several important suggestions to the Commission. Haryana Chief Secretary Anurag Rastogi and other senior officers were also present at the meeting.