Despite five southern States being assigned a collectively higher share under the vertical distribution scheme of the 16th Finance Commission (FC) than in the past, Tamil Nadu’s share has seen only a marginal rise.

The share of Tamil Nadu, which was 4.079% in the 15th FC, rose to 4.097% now, accounting for a rate of increase of 0.44%. This was followed by Telangana with a rise of 3.43% and Andhra Pradesh with 4.2%. Only Karnataka and Kerala have witnessed a double-digit rate of increase — 13.27% and 23.74%. At the all-India level, Kerala’s degree of rise is only next to Haryana’s 24.52%, while the third slot goes to Karnataka.

16th Finance Commission report tabled, states’ tax share retained at 41%

The Centre’s decision to retain States’ share in the common pool of taxes at 41% for 2026–31 has sparked criticism from opposition leaders. Finance Minister Nirmala Sitharaman tabled the Sixteenth Finance Commission report in the Lok Sabha on February 1, 2026, setting the framework for tax devolution between the Centre and States. Several States, including Karnataka and Kerala, had sought a higher 50% share, citing rising fiscal responsibilities.
| Video Credit:
The Hindu