The Seventh State Finance Commission submitted its first report to the Kerala Governor on Monday. Governor Rajendra Vishwanath Arlekar received the report from Commission Chairperson Prof K N Harilal at a function held at Lok Bhavan at 11 am.

Finance Commission member and Finance Department Secretary K R Jyothilal, Commission Secretary P Anil Prasad and Adviser Prof K K Harikurup were present at the event. The Governor will forward the report to the state government for further action.

The report contains recommendations for the 2026–27 financial year. Recommendations for the remaining period—from 2027–28 to 2030–31—will be submitted after the Central Finance Commission releases its report, which is expected to have a significant impact on the state’s financial position.

The Seventh State Finance Commission was constituted in September 2024 with a two-year tenure. Its primary mandate is to recommend the share of funds to be devolved to local self-governments from the state’s annual plan and tax revenue, along with criteria for distributing allocations under various heads.

As part of the exercise, the commission carried out extensive data collection and consultations with elected representatives, officials and experts. It held sittings at district planning committees, city corporations and other selected local bodies across the state, and interacted with leaders of political parties, associations of local representatives, government departments, social organisations, voluntary groups and subject experts. The commission also undertook studies on decentralised planning, resource mobilisation and financial devolution.

Kerala has long been considered a model for resource transfer to local governments, shaped by successive state governments and earlier State Finance Commissions, the commission said in a statement. The Seventh Finance Commission has sought to strengthen this framework while factoring in major changes in the economic structure to introduce suitable modifications in resource distribution.