No cut in devolution of funds to Telangana State: Sitharaman

Hyderabad: Union Finance Minister Nirmala Sitharaman did not agree that the Centre had imposed any cut on devolution of funds to Telangana or is not cooperating with the state.

"In fact, Telangana was given 0.5 per cent of higher borrowing limit compared to other states," her team said.

Her officials also pointed out that Telangana recorded one of the biggest increases in total Central transfers in last five years. The increase in transfers from the Central taxes and grants was 128 per cent during the period of 14th Finance Commission. They said the devolution increased from Rs 46,747 crore in earlier Finance Commission period to Rs 1,06,666 crore in the 14th Finance Commission period.

Addressing a news conference after interacting with the representatives of trade and industry here, Sitharaman said the Centre was moving ahead with the spirit of cooperative federalism. She has clarified that the devolution of funds is decided by the Finance Commission and not by the Finance Ministry.

"The Centre is not belittling contribution of any state to the Central pool of taxes. As the number of states came down by one and the number of Union Territories increased by two, there was some change in devolution of funds to the states," she said.

She also said 15th Finance Commission was looking into the suggestion that performing states should be given incentives. She said the Commission had given its report only for one year and while submitting its full report in April, it may make necessary recommendations.

Without naming Telangana Industry Minister K T Rama Rao, Sitharaman said a minister had taken exception to her using the term "given" while replying to a question in Parliament about devolution of the Central funds to Telangana.

"He is saying Telangana is contributing and what the Centre is saying ''given'' is our right. It's correct. Every state is contributing. Telangana is also making good contribution," she said.

"Given is common expression used in Parliament. If he has any objection, he should write to the Lok Sabha Speaker to give a ruling that this word should not be used," she added.