16th Finance Commission Chairman Commends Tripura's Financial Management Amid Lower Per Capita Income

Arvind Panagariya, the chairman of the 16th Finance Commission, commended Tripura's financial management despite its per capita income being below the national average. During a visit, the Finance Commission team engaged in detailed discussions about Tripura's financial objectives for the five-year period starting from the fiscal year 2026-27. Chief Minister Manik Saha, Finance Minister Pranajit Singha Roy, and Chief Secretary JK Sinha attended this meeting.

The Tripura government has outlined its projected expenditure and revenue collection for the upcoming five years beginning in 2026-27. Panagariya noted that Tripura's financial situation appears stable and well-managed, with both debt burden and committed expenditure showing a decline. He highlighted ongoing efforts by successive Finance Commissions to redistribute revenue to states with lower per capita income than the national average.

Tripura's Economic Transition

Panagariya praised Tripura's transition from an agriculture-dependent economy to growth in services and industry sectors. Currently, only 30-31% of Tripura's workforce is engaged in agriculture, compared to the national average of 45%. This shift is seen as a significant indicator of the state's overall economic growth.

In discussions about Tripura's proposals, Panagariya mentioned that the state has advocated for a 50% vertical share of the divisible pool between states and the Centre. Presently, this pool is divided in a 41:59 ratio. The state also suggested increasing the income distance criteria share from 45% to 50%.

Future Financial Plans

Regarding the central pay structure for state government employees, Panagariya noted that Tripura has presented its expenditure and revenue collection plans for the next five years. He explained that a one-line statement on these financial projections was included in their memorandum. However, the final decision by the finance commission is awaited.

The commission is expected to submit its recommendations to President Droupadi Murmu by October 31. In a social media post, Chief Minister Manik Saha mentioned handing over a memorandum to Dr Arvind Panagariya, outlining key demands for improving the state and its people.