KCR appeals for generous share in Central pool
Requests for 40 percent of the tax-revenue collected by Centre in State
Says Central assistance should be in tune with development strategies of states
Finance Commission impressed with cogent presentation
Reddy promises to recommend realistic package
Hyderabad, September 20: YV Reddy, chairman of 14th Finance Commission, appears to have been convinced with the presentation made by Telangana government representatives headed by Chief Minister K Chandrasekhara Rao (KCR). Reddy had expressed his sympathy for the newborn state and promised at a press conference on Friday to study the requirements and make the recommendations keeping in view the points raised by KCR and his team.
KCR had tried to impress the commission that the Centre should give the new state at least 40 percent of the taxes it collects in Telangana. Making department-wise presentation, the state government sought grants-in-aid to the tune of Rs 23,475 crore for the next five years. Reddy, a former Governor of Reserve Bank of India, also heard in rapt attention the pleas made by KCR that the Centre should write off the loans to be paid by the state besides giving a special package for development of the infant state. He said 80 percent of the population of Telangana belongs to SC, STs, BCs and other weaker sections and an erroneous impression has been created by vested interests that the financial position of TS is very strong. The higher tax collection in Hyderabad was due to the major VAT dealers paying their taxes in Hyderabad for sales that take place all over AP. This advantage would cease now that the state was divided. KCR said the challenge before his government is to regain the growth momentum and make it inclusive.
KCR had said that the Telangana region was neglected in the united Andhra Pradesh resulting in backwardness. Mahaboobnagar and Khammam districts are particularly backward with no significant development in the last six decades. In fact, nine out of the ten districts in the state would come in the backward category. He presented the status report to the Commission pointing out the need to align resources in line with the development strategies of the states concerned. He argued in favour of a paradigm shift in the allocation of resources by the Centre. The CM had also tried to explain that the non-tax revenues of the Centre have been increasing what with the off-shore royalties, sale of spectrum and disinvestment proceeds contributing the Centre’s kitty considerably. The reduction in the size of the divisible pool also has to be taken into account, the CM added. KCR made a fervent appeal that performing states should not be punished and extra weightage has to be given to the states that are faring better.
Responding to the presentation, Reddy promised to study the proposals in detail on Monday and recommend a package that is “desirable, feasible and realistic.” He complimented the state government for the cogent presentation touching all the areas. Reddy commended the government for taking positive and innovative initiatives aimed at fulfilling the election promises.