Bhopal March 3 Madhya Pradesh is gearing up for a pivotal moment as a high-profile delegation, led by Arvind Panagariya, Chairman of the 16th Finance Commission, is visiting the state from Tuesday.
This visit will serve as a litmus test for the public investments made over the past decade, scrutinising whether the funds pumped into the state have effectively translated into improved human development indices.
State Urban Development Minister, Kailash Vijayvargiya, said in Bhopal on Tuesday, “The members of the 16th Finance Commission have arrived and will engage with various officials and stakeholders in the state.”
This visit follows the footsteps of the 15th Finance Commission, which had previously expressed “marginal improvement of human indices” in the state, despite confirming the “accuracy” of investment figures.
The primary focus of the delegation's visit is to deliberate on crucial issues such as tax devolution between the Center and states, the determination of grants-in-aid, and the equitable allocation of resources. The recommendations made by the commission will cover a five-year period, from April 1, 2026, to March 31, 2031.
To provide context, the 15th Finance Commission, chaired by NK Singh, had recommended that state health spending be increased to over 8 per cent of their budget by 2022.
Additionally, the 14th Finance Commission had recommended a devolution of Rs 12,200.72 crore to Madhya Pradesh as Basic Grant (6.77 per cent of total grants) and Rs 1,355.64 crore as Performance Grant (6.77 per cent of total grants) for the period of 2015-20.
The 15th Commission's report also emphasised that, in light of macro-economic developments such as growth, inflation targeting, and GST implementation, the state should aim for a fiscal deficit of 2.5 per cent during 2020-25, maintaining the debt-GSDP ratio at around 23.8 per cent.
During their visit, the commission will hold meetings with representatives from political parties, local bodies, panchayats, urban bodies, and administrative officials. Discussions will focus on the impact of the increased tax devolution rate on the state's financial condition and changes in expenditure patterns.
Additionally, the commission will tour various regions of Madhya Pradesh to directly assess the impact of financial schemes, development initiatives, and policies.
They will review the progress of various development projects with departmental officials and seek suggestions for future improvements.
The discussions will help determine the state's future financial resources, accelerating its overall growth.
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