‘New State is strapped for funds’
Finance Minister Harish Rao has requested the Central government to release pending amounts under different heads at the earliest as the new State is “strapped for funds”.
In a memorandum submitted to Union Finance Minister Nirmala Sitaraman, he said that the State was yet to get funds to be released towards TS share in the IGST, special assistance for backward regions as promised in the AP Reorganisation Act 2014, and special grant recommended by the Finance Commission. The Centre, he said, left ₹13,944 crore under IGST for 2018-19 unapportioned and the amount was retained in the consolidated fund of India.
Of the total, the State’s share worked out to be ₹352 crore (4.08% of the 50% share amounting to ₹281 crore and ₹71 crore through tax devolution). The estimated amount released through tax devolution was ₹142 crore leaving a balance of ₹210 crore.
The State was yet to get grants amounting to ₹450 crore, ₹50 crore each for the nine of the 10 backward districts, for the fiscal year 2019-20. The number of districts had gone up from 10 to 33 since the formation of the State and the number of backward districts rose from 9 to 32 at the same time. The Centre should therefore extend the special assistance to backward districts for five more years and the grants for the current year along with the amounts pending for 2019-20 should be released.
Mr. Harish Rao recalled that the 15th Finance Commission recommended special grant of ₹723 crore on the ground that estimated tax devolution to the State in 2020-21 was lower than that in 2019-20. Such decline was not observed in any previous year. The grant was however, denied on the pretext that it would set a new precedent.
In the interest of maintaining the tradition and sanctity of the Finance Commission’s recommendations, the Centre should reconsider the decision not to give the grant and release the amount at the earliest, he added.
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