Telangana Government on Tuesday urged the 16th finance commission to increase the share of states in central taxes from the existing 41 % to 50% because over the years cesses and surcharges that are not shared with states have gone up. Deputy Chief Minister in-charge of Finance Bhatti Vikramarka while addressing the meeting with the Chairman of the Finance Commission Arvind Panagariya and members also sought the help of the commission to see that states should be provided with adequate autonomy.
Emphasising on the fact that the debt in Telangana has crossed Rs 6 lakh crore. 85 lakh crore, up to the end of the last financial year, while addressing the meeting with the Commission Chairman Arvind Panagariya and members, Reddy requested the panel to either re-finance the debt or provide the state more grants because part of the revenue is still being used in repaying the loans.
Telangana CM urges 16th Finance Commission to Increase
“I also firmly stand that my demand and I on behalf of all states insist on this increase (of) allocation of Central funds to states from 41 per cent to 50 per cent. I assure you that if you are able to do this then let me take a big part of the Hon’ble Prime Minister of India Shri Narendra Modi’s vision of making India a 5 trillion USD economy.”
During the meeting Deputy Chief Minister in-charge of Finance Bhatti Vikramarka while speaking on the floor of the house appealed to the finance panel not to restrict the states’ freedom in implementing CSS (centrally-sponsorship schemes) as per their district development needs.
“Moreover, we would like to see the increase of states’ share of the Central taxes from 41 percent to 50 percent We observe that over the years there are some cesses and surcharges which are levied and accumulated but are not shared with the states and have led to states getting less share of the total gross tax revenue,” he said.
He further said that the state government wants the Finance Commission not to stick firmly to the per capita income distance as the measure for horizontal devolution, as measuring prosperity and well being only through the per capita income would deprive the Telangana state of the necessary resources required to address inequities within the state.
The state government is arguing on the need to alter the formula for horizontal devolution to include at least fifty per cent of GSDP contribution.
“If there were a greater weight on GSDP one would have more reforms adopted by the states leading to increase productivity, investments and jobs which constitute to the national economy… It would not only make states more competitive but would also help to reduce regional disparities and thus promote balanced development across the country,” he said.
Noting that, he said many expenses like schemes like Rythu Bharosa, farm loan waivers and food subsidies are called ‘freebies’; reiterated the need for the Commission to acknowledge these programmes as costs for building a better future for our people.
The current head of the 16th Finance Commission, Arvind Panagariya also met several political parties, the representatives of local bodies, and the industry chambers on Monday during the visit to Telangana.
He suggested that the state is already spending a substantial proportion in an effort to repay debts and thus asked the Finance Commission either to help to refinance this debt or to provide additional support to save the necessary amount for further development.
The 16th Finance Commission headed by the commission chairman, Arvind Panagariya had consultations with a number of political parties, local-bodies emissaries and chambers of commerce/business organizations in Telangana on Monday during the commission’s tour of the state.
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