Odisha demands hike in central taxes to 50 %, fully funding of SDRF

By Sukanta Kumar Mohanty

Bhubaneswar, Feb. 6: The Odisha government on Thursday submitted a demand before the 16th Finance Commission to increase the states’ share in central taxes to 50%. Additionally, it sought 100% funding of the State Disaster Response Fund (SDRF) by the Centre. 

 Currently, an eight-member team of the 16th Finance Commission, headed by Dr. Arvind Panagariya, is on a four-day visit to Odisha, holding discussions with state government officials and political parties regarding the state’s demands and requirements. 

 Sharing details about Odisha’s demands, Chief Minister Mohan Charan Majhi said the state submitted a memorandum to the Finance Commission, seeking a total sanction of Rs 12,59,148 crore for the five-year period from 2026 to 2031. 

 The Rs 12.59 lakh crore demand includes Rs 9,88,422 crore for pre-devolution revenue deficit, Rs 1,00,434 crore for the State Specific Fund, Rs 1,00,034 crore for grants to local bodies, Rs 31,004 crore for the State Disaster Response Fund (SDRF), and Rs 29,252 crore for the State Disaster Mitigation Fund (SDMF). 

 “We have submitted a comprehensive memorandum to the 16th Finance Commission, seeking Rs 12.59 lakh crore. Additionally, as Odisha is disaster-prone and frequently affected by natural calamities, we have requested 100 per cent funding for the SDRF instead of the existing 75 per cent. If all our demands are met, there will be a significant transformation in rural and urban local bodies, as well as overall progress in the state,” the Chief Minister said. 

Speaking to reporters, 16th Finance Commission Chairperson Dr. Arvind Panagariya stated that Odisha has sought increased weightage for various criteria, including forest cover and tax and fiscal efforts. 

 “The Odisha government has requested 45 per cent weightage for income distance, 15 per cent for modified population, 5 per cent for density, 10 per cent for forest ecology, 15 per cent for fiscal discipline, and 10 per cent for demography,” Panagariya said. 

 In response to a query, the Finance Commission Chairperson said that most states have sought an increase in their share of the central divisible pool to 50 per cent. 

 When asked how the Commission will assess the population profiles of various states in the absence of a census since 2011, Panagariya said the most reliable and authentic available data and statistics would be taken into account. 

The Finance Commission Chairperson praised the presentation by Saswat Mishra, Principal Secretary of the State Finance Department, saying, “It was very impressive.” He noted that Odisha’s request to consider Scheduled Tribes, Scheduled Castes, and the elderly as a separate demographic entity was a completely new phenomenon, which the Commission appreciated.