6th Maharashtra Finance Commission Tax Share Local Bodies Recommendations Devendrafadnavis

According to the report, Maharashtra currently transfers around Rs 96,733 crore, equivalent to 26.3 per cent of the state’s own tax collections, to urban and rural local bodies through grants and compensation mechanisms. However, local bodies continue to face an annual funding gap of Rs 8,217 crore, equivalent to 3.6 per cent of the state’s average State Own Tax Revenue (SOTR).

The report estimates that assigning profession tax to local bodies could generate resources equivalent to 0.8 per cent of SOTR, a share in Motor Vehicle Tax another 0.6 per cent, and improvements in local tax collection 1.2 per cent, while the remaining 1 per cent of SOTR would need to come through additional transfers from the state government.

The report has proposed a 10% cess on the premium collected when agricultural land is converted for non-agricultural use, with the amount to be transferred to the municipality or gram panchayat where the development takes place.

Municipalities and panchayats have also been proposed to be allowed to lease public land, markets, commercial complexes, parking lots and other properties for up to 30 years.

The recommendations would apply to all urban local bodies, including the Brihanmumbai Municipal Corporation (BMC), Thane, Navi Mumbai, Pune, Nashik and Nagpur municipal corporations, and villages on the outskirts of these cities that are witnessing rapid urban expansion.

Other recommendations include a larger share for local bodies in additional stamp duty collections, recovered traffic challans and disaster mitigation funds, formula-based distribution of District Planning Committee funds and a Rural-Urban Transition Policy for villages around cities that increasingly resemble towns but continue to be governed as villages.

Maharashtra’s population is projected to touch 129.3 million in 2026, including 63.8 million people living in urban areas.

Vallabh Ozarkar is a Senior Correspondent with The Indian Express' Mumbai bureau, recognized as an authoritative and deeply knowledgeable voice on the politics, governance, and infrastructure of Maharashtra. With more than nine years of experience in major news organizations, his reporting delivers high standards of Expertise and Trustworthiness. Expertise & Authority Current Role: Senior Correspondent, The Indian Express, Mumbai bureau. Geographical Specialization: Provides exclusive and detailed coverage of Maharashtra politics and governance, operating at the epicenter of the state's decision-making in Mumbai. Core Authority: His reporting demonstrates deep Expertise across critical and often complex state matters, including: Political Dynamics: In-depth analysis of the ruling coalition (Mahayuti) and opposition (MVA), internal party conflicts, and crucial election updates, including local body polls and municipal corporation tussles. Governance & Policy: Focused coverage on significant state policies, such as the overhaul of Mumbai's 'pagdi system' (rent control for old buildings) and social welfare schemes (e.g., Ladki Bahin Yojana accountability). Infrastructure & Development: Reports on major urban and regional infrastructure projects, including the Mumbai Water Metro, Uttan-Virar Sea Link, and Thane Metro development. Administrative Oversight: Follows legislative actions, cabinet decisions, and reports on issues of accountability and alleged fraud within state departments. Experience Current Role: His role at The Indian Express—a leading national daily—validates the credibility and standard of his reporting. Career Foundation: Prior to The Indian Express, Vallabh contributed to other major metropolitan news outlets, including the Mumbai Mirror and DNA - Daily News & Analysis, providing a solid foundation in rigorous urban and political journalism. Evidence of Impact: His work consistently breaks down complex political developments and administrative failures, such as exposing discrepancies in government welfare schemes, cementing his reputation as a trusted source for ground-level, impactful news from Maharashtra. He tweets @Ozarkarvallabh ... Read More