Bhubaneswar, February 28: The Sixteenth Finance Commission headed by renowned economist Dr. Arvind Panagariya has recommended more than double the amount of funds for Odisha during the award period (2026-27 to 2030-31).
According to Government officials, the 16th Finance Commission has already submitted its report to the Government of India and the latter has also accepted its recommendations.
The report of the 16th Finance Commission was tabled by Union Finance Minister Nirmala Sitharaman while presenting the Union Budget for 2026-27.
Based on the Report of the 16th Finance Commission, the Odisha will get the following benefits:-
The Commission recommends retaining the States’ share in the divisible pool at its current level of 41 percent. Inter-se share of Odisha in the divisible Pool: 4.420 percent, the officials said
Accordingly, the Commission estimates an amount of Rs 4,61,669 crore to be transferred by Government of India to the State for the award period (2026-27 to 2030-31) which is more than two times the amount assessed by 15th Finance Commission for the award period (2021-22 to 2025-26), they said.
As regards grants for local bodies, 16th Finance Commission has recommended an amount of Rs 23,793 crore over the 5 years award period, in comparison to the 15th Finance Commission recommendation of Rs 15,752 crore.
Similarly, a total amount of Rs.8,899.5 crore has been recommended both for State Disaster Response Fund (SDRF) and State Disaster Mitigation Fund (SDMF) taken together for the award period 2026-27 to 2030-31, in comparison to the 15th Finance Commission recommendation of Rs 8,865 crore over the five years award period.
There is no doubt that Odisha will get a higher amount of funds during the next five financial years in comparison to the 15th Finance Commission grants. But, still, Odisha is all set to get less than the expectations of the State because the total weight age of the State has been reduced sharply by the 16th Finance Commission, according to a local economic expert.
The state is estimated to receive funds in accordance with 4.42 per cent of the divisible pool, lower than the 4.528 per cent horizontal devolution recommended by the 15th Finance Commission, he said.
The Odisha Government had proposed that its share be raised to 4.964 per cent.
According to the 16th Finance Commission report, the horizontal devolution has been fixed by giving 17.5 per cent weight to population of 2011, 10 per cent to demographic preference, 10 per cent to area, 10 per cent to forest, 42.5 percent to per capita GSDP distance and 10 per cent to contribution to GSDP by the State.
But, the Odisha Government led by Chief Minister Mohan Charan Majhi, during discussion with members of the 16th FC here on February 7, 2025, had made a strong pitch for increasing the share of States in the vertical devolution of funds from the divisible pool of central taxes from the current 41 per cent to 50 per cent. This was rejected by the FC, said the expert.
At that time, the CM had demanded fund flow to the tune of Rs 12,59,148 crore for five years from 2026 to 2031. The State had demanded Rs 9,88,422 crore to make up for pre-devolution revenue deficit, Rs 1,10,434 crore for state-specific need, Rs 1,00,036 crore as grants to local bodies, Rs 31,004 crore for disaster response and Rs 29,252 crore for disaster mitigation.
16th FC recommends Rs 4.61 lakh Cr grant for Odisha, more than double of 15th FC grant
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