Opposition-ruled South has reasons to cheer with higher tax share on its way

The southern states, four of which are governed by the Opposition parties, may not have much to complain about as for the central devolution in the fiscal year 2026-27. Each of them will get a few thousand crore rupees more than before.

Devolutions of the central taxes and duties to states under the 16th finance commission recommendation will kickstart from the coming year. The 16th FC, chaired by Aravind Panagariya, recommended a higher devolution to the South, recognizing their claim for a higher share and to reward performance. The states, in their memoranda to the FC during its visit to states, however, had demanded a much higher share.

As a result, Andhra Pradesh will get Rs 6796 crore more in 2026-27 as the state’s share has gone up from 4.057% to 4.217% between the two finance commissions. Andhra Pradesh is ruled by a combine led by NDA’s ally Telugu Desam Party (TDP).


Karnataka, one of the most vocal of the states, will get Rs 11,173 more. Its smaller neighbour Kerala will get Rs 8973 crore more while Tamil Nadu will be richer by Rs 3281 crore.

Union Steel & Heavy Industries Minister HD Kumaraswamy said Karnataka would get a higher share in central taxes and duties in 2026-27 as per the 16th Finance Commission recommendation. Karnataka’s ruling Congress must now stop criticizing the Centre for political reasons, he said.

Chief Minister Siddaramaiah, however, said the 16th Finance Commission outcome was deeply disappointing sayinng Karnataka’s share in divisible taxes had been cut to 4.131% from 4.71% in the 14th Finance Commission, causing an annual loss of ₹10,000–15,000 crore and weakening the government’s ability to invest in welfare, infrastructure, irrigation and development, despite Karnataka’s strong contribution to national growth.

State-wise distribution of net proceeds of Union Taxes & duties to States

State	Share (%)		Total
	2025-26	2026-27	2025-26	2026-27
Andhra Pradesh	4.047	4.217	57566	64362
Karnataka	3.647	4.131	51876	63049
Kerala	1.925	2.382	27382	36355
Tamil Nadu	4.079	4.097	58021	62530
Telangana	2.102	2.174	29899	33180

(% as recommended by the Finance Commission)