Finance panel lets down TS, AP

Commission actually gave states less money

The 15th Finance Commission has poured cold water on Telangana and Andhra Pradesh states expectations of receiving funds for the

2020-21 financial year. When the Finance Commission met Chief Ministers K. Chandrasekhar Rao of Telangana state and Y.S. Jagan Mohan Reddy of AP, they pleaded for sanction of funds under various heads. Both CMs said that there should be an increase in the states' share in tax devolution, but the Finance Commission has reduced the states' share from 42 per cent to 41 per cent.

The Finance Commission did not honour any request of the Telugu Chief Ministers.

In the ensuing financial year, the TS government will get `33,104 crore and AP `46 324 crore under tax devolutions and various grants. This will have an impact on annual Budgets of both states.

Both states have asked the commission to increase the borrowing limit, but the commission has not recommended this. The Finance Commission has recommended `5,897 crore as revenue gap funding to AP against its request of

`5 lakh crore in five years. Moreover, the share of total funds from the Centre to Telangana state and AP has come down compared to the 14th Finance Commission. Telangana state's share has come down from 2.4 to

2.1 per cent and AP from

4.3 to 4.1 per cent.

The Finance Commission has calculated that for AP the predevolution revenue deficit will be `41,054 crore and for Telangana state, the pre-devolution revenue surplus will be `7,735 crore. It has recommended `35,156 crore as tax devolution to AP and

`18,241 crore to Telangana state.

The commission said that post devolution, AP will face a `5,897-crore revenue deficit and recommended this amount as revenue deficit grant. Telangana state will have

`26,698 crore revenue surplus. In fact both states are facing revenue deficit by December in the current financial year.

According to government records, by December 2020, the Telangana state government will face a `3,404crore revenue deficit and AP, `29,407 crore.

The Finance Commission has projected that in the 2020-21 financial year AP's own tax revenue will be `77,398 crore and nontax revenue will be `5,267

crore. TS’s own tax revenue will be `87,129 crore and non-tax revenue will be `10,728 crore.

Surprisingly, in the current financial year, the Telangana state government had projected in the Budget `15,875.03 crore as non-tax revenue but by December 2019 it had collected only `2,983 crore. It has collected `60,261.78 crore as tax revenue against its budget projection of `89,047 crore.

The AP government projected `7,354.72 crore as non-tax revenue but by December it had collected only `2,173 crore and received tax revenue of

`57,162 crore against its Budget projection of

`1,10, 271 crore.