The Gujarat government has sought an increase in the share of states in the ‘divisible pool of taxes’ from the current 41% to 50%, as per the 16th Finance Commission chairperson, Dr Arvind Panagariya.

In an official release, the Gujarat government stated that it has submitted a proposal before the commission to consider “fiscal prudence as an important factor in allocating funds among states”.

States like Gujarat, which have maintained such figures, should be “rewarded”, the statement says.

On a two-day visit to the state, Panagariya and four other members of the commission chaired a meeting with Chief Minister Bhupendra Patel and Chief Secretary Raj Kumar among other senior officials on Monday.

Addressing the media, Panagariya stated that the commission could recommend an increase from 43% to 45% in the divisible pool. However, he adds, the final decision to sanction the proposal rests with the central government.

As per the recommendation of the 15th Finance Commission, 41% of the gross tax revenue currently goes to the states.

Acknowledging the state’s economic robustness, Pangariya said that Gujarat has maintained a growth rate of 8.5% in the last 10 years against the country’s average real GDP growth rate of 6%.

The memorandum submitted by the state government also urges the commission to address several issues, including increasing urbanisation, the multidimensional poverty index (MPI), the contribution to national GDP, the importance of sustainable development, and fiscal prudence.

Gujarat is the ninth state in the roster where the five-member panel have visited.

Tasked to finalise its report on such recommendations made by the states by October 2025, the commission will devise a report for a five-year tenure starting from April 1, 2026.