AP pitches for rewarding states with better finance management

The Andhra Pradesh government Thursday put forth a number of suggestions before the 14th Finance Commission for \"rewarding\" states based on fiscal management and enhancing devolution of Central taxes by according weight to different parameters.

Published: 12th September 2013 03:48 PM  |   Last Updated: 12th September 2013 03:48 PM   |  A+A-

By PTI

The Andhra Pradesh government Thursday put forth a number of suggestions before the 14th Finance Commission for "rewarding" states based on fiscal management and enhancing devolution of Central taxes by according weight to different parameters.

It also wanted amendments in the Fiscal Responsibility and Budgetary Management Act to ensure "quality of fiscal consolidation" by states.

Expressing serious concern over the declining state share in devolution of Central taxes, Chief Minister N Kiran Kumar Reddy urged the 14th Finance Commission to ensure that at least 40 per cent of the divisible pool of Central taxes were devolved to the states.

Delivering the keynote address at a meeting of the 14th Finance Commission members here today, the Chief Minister also suggested that grants equivalent to at least four per cent of the Central taxes be recommended for the local bodies while the Central share in disaster relief fund be enhanced to 90 per cent from the present 75 per cent.

"It is a matter of grave concern to Andhra Pradesh that its share in tax devolution has been coming down with each Finance Commission.

"From 7.91 per cent in the Tenth Commission, it came down to 6.94 per cent in the 13th Commission. We are distressed that instead of being rewarded, we are being penalised for significantly improving our per capita income level," the Chief Minister said.

Noting that area and population of a state represented the fiscal needs better than other indicators, Reddy suggested that area and 1971 population may be assigned weights of 30 and 20 per cent respectively.

"We accept the proposition that vertical imbalances are common in most federations, being a necessary consequence of the system of assignment based on comparative advantage.

"Our major concern is that there has been an accentuation of vertical imbalances far beyond those envisaged in the Constitution," the Chief Minister said.

He proposed that "instead of speaking in terms of re-distribution of resources between the Centre and the states, there is an imperative to re-align resources in favour of the states." .

Stay up to date on all the latest Andhra Pradesh news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp