Ranchi: The 16th Finance Commission, headed by Chairman Dr. Arvind Panagariya, held meetings with the Jharkhand state government and various political parties over a three-day visit. Addressing the press, Dr. Panagariya emphasized that the state must conduct local body elections—including municipal and panchayat elections—by December 2025 in order to receive pending financial allocations. He clarified that failure to do so would result in the lapse of those funds.
Dr. Panagariya further explained that issues related to “special state” status or financial packages do not fall under the purview of the Finance Commission. “Grants are allocated through the Union Budget and are conditional,” he stated, adding that the commission has no direct control over delays in such payments.
Commenting on GST-related concerns, he noted that Jharkhand has submitted a new demand to revise the compensation formula to mitigate revenue losses incurred due to GST implementation. However, despite a series of meetings with various stakeholders, Dr. Panagariya refrained from commenting on which areas in Jharkhand appear weak or require special assistance. “Everything will be determined based on the commission’s set formula,” he said repeatedly.
Jharkhand Finance Minister Radhakrishna Kishore presented the state’s case before the commission, requesting ₹3.03 lakh crore across 23 departments for the next five years. He emphasized that this funding is essential to transform the state’s socio-economic landscape. Kishore highlighted that GST compensation had ceased after July 2022, estimating that Jharkhand stands to lose ₹61,677 crore between FY 2025-26 and 2029-30 due to this change.
He also raised concerns over inadequate forest-based allocation formulas. The 14th Finance Commission had allocated 7.5% for forest cover, which was increased to 10% in the 15th Finance Commission. However, Kishore argued that the formula remains insufficient and should include both dense and open forest areas. He urged that the state’s share in central taxes be increased from 41% to 55%.
Additional demands included central support for expanding irrigation capacity across 14.19 lakh hectares of land, as well as rainwater conservation. Kishore also emphasized that while Jharkhand is mineral-rich, its road infrastructure is underdeveloped—averaging only 186 km per 1,000 sq km compared to the national average of 500 km.
The state also requested financial support for enhancing per capita income and boosting sectors such as higher education and agriculture. A detailed memorandum was handed over to the commission, jointly submitted by Finance Minister Kishore, Urban Development Minister Sudivya Kumar Sonu, Excise Minister Yogendra Prasad, and former Finance Minister Rameshwar Oraon.
Jharkhand raised concerns over outstanding dues from various central schemes and entities. It claimed ₹1.36 lakh crore is pending from coal companies, ₹1,300 crore under MGNREGA, and ₹5,235 crore in the Jal Jeevan Mission.
Urban Development Minister Sudivya Kumar Sonu reiterated the state’s efforts to conduct municipal elections. While acknowledging the condition of holding elections for fund release, he said at least 75-80% of funds should not have been withheld. “The Centre should not treat states as elder and younger sons,” he said, noting that despite being mineral-rich, Jharkhand suffers from pollution, unemployment, displacement, and insurgency—issues that warrant additional central support.
The Finance Commission also expressed concern over the state’s Public Sector Undertakings (PSUs), stating that many of them have not been audited in the past 10–12 years. Dr. Panagariya noted this as a serious lapse in Jharkhand’s financial management.