Photo: Reuters (Photo: Reuters)
Photo: Reuters (Photo: Reuters)

Telangana’s allocation of central taxes up 128% since 2015

Revenue secretary Ajay Bhushan Pandey says Telangana’s share is one of the highest in the country

HYDERABAD : Telangana’s share of central taxes (tax devolution) has gone up by 128% between the 14th and 15th Finance Commissions (2015 to 2020), said revenue secretary Ajay Bhushan Pandey.

Pandey, who was addressing a press conference with union finance minister Nirmala Sitharaman in Hyderabad on Sunday, said that the state’s share is one of the highest in the country.

Pandey’s statement came on a query about Telangana chief minister K. Chandrashekhar Rao (KCR) criticising the Union Budget 2020 over the state seeing a slash in the central tax allocated to it. The Centre had come under severe criticism from KCR, who called this financial year’s budget “disappointing" and termed it as “discrimination".

“Between the 14th and 15th Finance Commission (2015 to 2020), the increase is 128%, means what was 100 has become 228. And this is one of the highest ratios, much higher than other states. The percentage of tax devolution is decided by the Finance Commission and it has increased in the last 5 years," Pandey said. He added that the amount had gone up from Rs46,000 crore to a little over Rs1.06 lakh crore.

“There will be some limitations. One state has become less and two union territories have come up (referring to the abrogation of article 370 and creating the union territories of Jammu and Kashmir and Ladakh). The Finance Commission increased the percentage to the union territories," Sitharaman said during the press conference.

The union finance minister was in the city as part of the Centre’s exercise to reach out to traders and industry representatives through an interactive session. Adding to Sitharaman’s statement on Telangana’s share of central taxes, Pandey said that Telangana has been big in terms of total central transfers.

After the Union Budget 2020 was announced, Rao (KCR) lashed out against the Centre, calling the budget “atrocious". “In the 2019-20 financial year, Rs19,718 crore was the rightful due from the Centre to the Telangana state. But in the revised estimates, it was reduced to Rs15,987 crore. With this, in the present financial year, among the funds due from the Centre, there is a reduction of Rs3,731 crore," said a statement from KCR earlier this month.

Answering another question on the new alternative income tax slabs for those who don’t opt for any tax exemptions, Sitharaman also said that the Centre is not going to coerce any individual to chose the old or new one. “At the moment we have only started a second alternative. The idea is that India should eventually have a simplified, exemption free and reduced rate of taxes. It is up to the assessee, we are not forcing to come to the new system," she added.

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