Chief Minister K. Chandrasekhar Rao Telangana on Friday made a difficult shot to explain the factual situation of Telangana in next generation of income bifurcation of Andhra Pradesh before the 14th Finance Commission and urged him to recommend greater share of taxes collected by Center and improved central assistance and grants-in-aid to the State.
Submitting a status report to the Commission Telangana, Mr. Rao said the state had become a casualty in the combined AP and regional imbalances had risen due to the unbalanced policies. All bodies and committees were given the task of identifying backward areas were categorized nine out of ten Telangana districts as backward Mahabubnagar and Khammam be "hungrier and forth," he said.
Mr. Chandrasekhar Rao stressed the need to align resources for states as most of the sectors that touch the lives of persons within the jurisdiction of States. There was another compelling reason for a paradigm shift in the sharing of resources in favor of the States, as it had been a significant increase in non-tax revenue of the Centre of offshore royalties, sale of spectrum and disinvestment revenue. In addition, it had a reduction in the size of the divisible pool by the assessment processes and surcharges for the Center said.
Request the Finance Committee recommending the return of 40 percent of central government revenue to the States, Mr. Rao suggested that could easily be accommodated by a marginal reduction of 5 percent in the expenditure of the Centre on issues of state. He also sought to better assign weightages judiciously States and relaxation taking place in the FRBM rules to new states like Telangana.
Seeking review of the levels of debt of the United for sustainable fiscal environment, Mr. Rao asked the Commission to recommend the cancellation of outstanding central loans to the state, increasing the contribution of the Centre to the State Disaster Response Fund (SDRF) from 75 percent to 90 percent and increased grants to local entities by 2.5 percent of the divisible pool to at least 4 percent.
Announcing support for the introduction of GST Telangana chief minister, however, sought adequate to cover the loss of income and requested compensatory mechanism that oil and liquor outside the scope GST was maintained.
Commission President Y.V. Reddy, Prof. Abhijit Sen Members, Sushma Nath, Dr. Govinda Rao and Dr. Sudipto Mundle, ministers of various state government officials were present.