AP loses `6,500cr in tax devolution
Vijayawada: Andhra Pradesh will lose about `6,500 crore in devolution of taxes in the current fiscal due to fall in Central tax collections, adding to the woes of the already cashstrapped state government. Budget 2020 has brought with it only bad news for Chief Minister Y.S. Jagan Mohan Reddy who has lined up several welfare schemes as part of fulfilling his electoral promises.
The Andhra Pradesh government will lose about `6,500 crore in devolution of taxes in the current fiscal due to fall in Central tax collections, adding to the woes of the already cash-strapped state government.
Budget 2020 has brought with it only bad news for Chief Minister Y.S. Jagan
Mohan Reddy who has lined up several welfare schemes as part of fulfilling his electoral promises.
The first hit is in the form of a massive shortfall in the devolution of tax revenue for the current fiscal followed by Union finance minister Nirmala Sitharaman ignoring financial assistance to projects varying from Polavaram to new ports to the petrochemical complex besides, of course, the Special Category Status.
Official sources told Deccan Chronicle that the state government kept a budgetary provision of `34,833.18 crore vis-a-vis devolution of taxes but will get only `28,242 crore.
This is in addition to huge revenue shortfall expected in state’s own tax revenues.
Except for excise, the
GST and stamps and registration have been witnessing shortfall in revenues projected in the Budget.
Of the `55,000-crore target fixed for the state’s own GST, officials feared that only 70 per cent would be realised. This would mean shortfall of another `15,000 crore.
The Centre gave another shock to the state by projecting a lower devolution for the next fiscal too.
The Centre indicated a revenue of `32,237 crore for 2020-21, compared to the projected revenue of `34,833 cr in 2019-20.
“The Centre did not consider our request to take the 1971 Census as the base for devolution and went ahead with the 2011 Census by which time we achieved good progress in population control,” a senior official said, adding that the percentage of devolution had further come down to 4.11 per cent from 4.38 per cent.
The only silver lining is that the 15th Finance Commission has recommended to the Centre to extend financial assistance to the Andhra Pradesh government to compensate for the revenue deficit it witnessed after bifurcation.
The Finance Commission told the Centre to release `5,897 crore in 2020-21 to the state towards compensation. The amount pertained to one fiscal year and the subsequent amounts would be known later.
“We are thoroughly disappointed with the Budget. They completely ignored all our requests,” said finance minister Buggana Rajendranath Reddy in his reaction to the Union Budget.