TG seeks rise in Central taxes share

Hyderabad: The State Government has raised a plethora of demands before the 16th Finance Commission to overcome the mounting debt burden.

The government has requested the Commission to bring a policy permitting the state to restructure the loans with low interest rates, more devolution based on the GSDP growth, and freedom to the state to design schemes under CSS (Centrally-Sponsored Schemes) since the Central schemes were not in tune with the requirements of states and devolution of the state’s share in the cess and surcharge amount collected by the Centre.

Chief Minister A Revanth Reddy and Deputy CM and Finance Minister Bhatti Vikramarka in a presentation explained the financial condition and the need to get adequate central assistance to achieve the goals set by the state government.

Given the increased debt burden and interest payments to the tune of Rs 5,200 crore every month, the Chief Minister requested the commission to allow the states to restructure the loans. Currently, the state was paying 11.5 per cent interest on the loans and it would be reduced once the state was permitted to restructure the loans. They wanted an increase in the percentage of Central funds from 41 per cent to 50 per cent.

They said Telangana has been facing social inequalities and the resources were in the hands of only a few.

The government also pleaded with the commission to provide central assistance to strengthen the education sector under the Amma Adarsha School programme with the involvement of SHGs, Young India integrated residential schools, Skill University, and advanced ITIs to generate employment. It also sought help developing infrastructure projects like the Musi riverfront development project.

Given the huge damage caused due to recent floods, the Chief Minister requested the finance commission to recommend to the Centre for liberal assistance to the states to deal with disasters.

Reacting to this, Finance Commission chairman Panagariya said it was expected that better-performing states would generally say that (they faced a reduction in central allocations). “That (states which made progress saying their allocations declined) is to be expected. At least so far, what we have seen, in two of the states, Karnataka and Telangana, we have heard,” the economist told reporters here.

Asked for his response to the issue, he said, “the Commission is open to listening to everything. The Commission will think about all possibilities. What we will do in the end, I can’t tell, because I don’t know.”

To a query, if the Commission would consider raising the percentage of devolution (in favour of the states) as the Centre is understood to reflect economic buoyancy, he declined to comment at this stage.