Union Minister of Culture, Tourism and Development of North Eastern States G. Kishan Reddy, on Wednesday, claimed that Telangana had received approximately ₹1.34 lakh crore in tax devolution funds released by the Central government as part of the Finance Commission recommendations ever since Narendra Modi became Prime Minister in 2014.
In an official press release, the Minister, also the Secunderabad MP, asserted that the Centre had been playing a “proactive role” in the development of Telangana in the last eight years and the large transfer of funds was possible due to the increase in devolution of taxes to states from 32% in the 13th Finance Commission to 42% in the 14th Finance Commission.
A total of ₹8,379 crore GST compensation had been paid to Telangana and in a “spirit of cooperative federalism”, the tax devolution was 41% as per the 15th Finance Commission for 2020-21 to 2025-26. “It is a testimony to the steadfast resolve of our government to provide states with adequate financial resources to ensure a holistic development agenda as per their respective priorities,” he said.
Mr. Modi having served as Gujarat chief minister for 13 years was well aware of the problems faced by the states in terms of funding and thus more money had been released through the 14 & 15 Finance Commissions directly to Telangana. The Narendra Modi government had also agreed to pay GST compensation for a period of five years till June, 2022, with an annual increase of 14% based on the income of the states in financial year 2015-16 to compensate for the revenue loss due to the implementation of the single tax.
“This was a crucial step in ensuring production and manufacturing-oriented states did not lose revenue in switching to a tax that is based on consumption. It once again shows the resolve of the Government to build consensus on contentious issues,” added the Minister.
