More Stories

Informist, Tuesday, Sep 10, 2024

HYDERABAD – The Telangana government has appealed to the 16th Finance Commission to increase the states' share in central taxes to 50% from the current 41%, so that they can fund welfare programmes without stress.

In a meeting with the 16th Finance Commission led by Chairperson Arvind Panagariya, Telangana Deputy Chief Minister and Finance Minister M. Bhatti Vikramarka urged the finance panel to ensure that states are given the required autonomy to design centrally sponsored programmes according to their specific development needs instead of keeping them in a fixed ambit.

"Increasing the vertical devolution will give states the fiscal space they need to strengthen welfare programmes, address infrastructure gaps, and prioritise local development. This is not just a demand for Telangana but for all states, ensuring a more cooperative federal structure that will benefit the nation as a whole," Vikramarka said.

The Telangana government has appealed to the Finance Commission to reconsider the use of per capita income distance as the primary indicator in determining horizontal devolution. Measuring prosperity and well-being solely by per capita income would deny Telangana the resources needed to address the inequities that exist within the state, he said.

"We propose that the weightage accorded to income distance be reduced drastically. In its place, we suggest that the formula for horizontal devolution be modified to add at least a 50% weightage to GSDP (Gross State Domestic Product) contribution," Vikramarka said.

He said greater weight on GSDP would incentivise states to adopt reforms that improve productivity, attract investment, and create jobs, ultimately contributing to the national economy. He said this approach would not only make states more competitive but also help reduce regional disparities, encouraging more balanced growth across the country.

Pointing to the state's debt, which was nearly 6.85 trln rupees in 2023-24 (Apr-Mar), the Telangana government appealed to the Finance Commission to help the state to restructure the debt or provide additional assistance, as a significant part of the state's revenue is being spent on repayment of loans or payment of interest.  End

Reported by Narayana Krishna

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.