As Tamil Nadu has been singled out for the sharpest reduction in its share in the divisible pool of Central taxes, Chief Minister O. Panneerselvam has asked the Prime Minister to allocate funds for schemes like Chennai Monorail, desalination plants and package for deep sea fishing.
In his letter to Mr. Modi, the Chief Minister said the State’s share has come down to 4.023 per cent in the 14th Finance Commission recommendations, against 4.969 per cent share in the divisible pool of Central Taxes recommended by 13{+t}{+h}Commission.
The unbalanced formula adopted by the 14th Finance Commission has virtually singled out Tamil Nadu for the most adverse treatment. The reduction in the inter-se share of Tamil Nadu of 19.14 per cent represents the biggest loss in share amongst all States, he said. The State had lost out on all counts and has been doubly penalised for its prudent fiscal management, he pointed out.
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The non-inclusion of the Fiscal Discipline criterion also hurt Tamil Nadu, a State that performs. Tamil Nadu’s overall share in Central taxes increased by just 0.1 per cent. The loss to Tamil Nadu, due to the reduction in its share in the divisible pool and the discontinuance of special purpose and State-specific grants was estimated at Rs.6,000 crore per annum, the Chief Minister said, adding that the State would lose more with the inevitable reduction in Central Plan assistance.
Moreover, the Union budget had also inflicted more distress on the State. The abolition of wealth tax, conversion of Rs. 4 per litre out of the specific duty of petrol and diesel into road cess, delinking of 12 schemes from Central assistance and enhancing of State’s share for 13 key programmes meant the State’s expenditure priorities would be determined by the Centre.
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“The State being required to take on additional burden of expenditure on Central Government priorities is an unfair expectation and outcome,” he said, emphasising that the States’ share should be limited to a maximum of 25 per cent of the scheme cost in Centrally Sponsored Schemes to ensure the States’ own expenditure priorities were not distorted.
As the Union Budget has a provision of Rs.20,000 crore to be allocated for schemes approved by NITI Aayog, he sought allocation to redress the unfair treatment meted out to Tamil Nadu by the 14{+t}{+h}Finance Commission.
Cites unfair treatment meted out to State by 14th Finance Commission