Funds to Telangana as per Finance Commission: Finance Minister

Further, State has been given higher borrowing limit, says senior official

Union Minister of Finance Nirmala Sitharaman addressing media in Hyderabad on Sunday.

Union Finance Minister Nirmala Sitharaman on Sunday said devolution of funds to the States was done as per the recommendations of the Finance Commission and it should not be construed as Centre not doing enough for the States.

“The Centre has not reduced the share of States [as] what it has done is implementation of the Finance Commission recommendation,” she said to queries from media on Telangana ruling party leaders expressing disappointment at the level of devolution. Ms. Sitharaman, accompanied by senior officials of the Ministry, was speaking after the ‘Jan Jan Ka Budget’, an interactive session of Union Budget 2020-21 in the city.

Sharing details of the devolution, Expenditure Secretary T. V. Somanathan said from 2010-2015 the total releases to Telangana under the share of Central taxes, State Disaster Relief Fund, local body funds grants and others was ₹46,740 crore. During the next five years (2015-2020), which includes the rest of this fiscal, the estimated release to Telangana will be ₹106606 crore or an increase of 128%.

Thus, it is not correct to say the transfers to Telangana have been short. “In fact, it has been much higher than for many other States,” he said. Telangana is one of the few States which has been given a higher borrowing limit of 3.5% of SDP instead of 3% which is allowed for most other States. By virtue of the higher borrowing limit and the devolution, Telangana is one of the best endowed States financially, he said.

On a special grant of over ₹700 crore that the 15th Finance Commission had recommended to be issued to Telangana, the Finance Minister said it has been referred back to the Commission seeking certain clarifications as it did seem to be within the terms of reference.

Ms. Sitharaman also refuted that allocation for MNREGA scheme in the Budget had been reduced. “Compared to the BE announced in July 2019, for no programme [we] have reduced BE in 2020,” she said, while Mr. Somanathan said more provision will be made if required under the Revised Estimates.