Odisha legislators express concern over reduction in Central assistance to state

Besides, the FFC had also recommended that the State’s share in Central taxes should be `48,250 crore in 2019-20.
Odisha Assembly (File Photo |EPS)
Odisha Assembly (File Photo |EPS)

BHUBANESWAR:  Members cutting across party lines on Monday expressed concern in the Assembly over the drastic reduction of Central assistance to Odisha even as Finance Minister Niranjan Pujari said the State Government has strongly protested the Centre’s act of not implementing the recommendations of Fourteenth Finance Commission (FFC) on the sanction of funds.

Replying to a question from Ashwini Kumar Patra (BJD) and supplementary from other members, Pujari said the State Government has raised this issue in different forums like Inter-State Council, NITI Aayog and the Central Government’s pre-budget discussion.

The Minister said the FFC had recommended Rs 1,84,070 crore to Odisha as its share from the Central tax between 2015-16 and 2019-20. The State should have received Rs 1,35,820 crore during the four financial years from 2015-16 to 2018-19 as per the recommendation. However, Odisha has so far received Rs Rs 1,18,521 crore, which is Rs 17,299 crore less, he said.

Besides, the FFC had also recommended that the State’s share in Central taxes should be Rs 48,250 crore in 2019-20. But the Centre in its Budget has estimated only Rs 37,560 crore, which is again less by Rs 10,690 crore than the recommended amount, he said.Pujari said the FFC had recommended that the sharing pattern between the Centre and the State will be 90:10 ratio while sanctioning funds under State Disaster Response Fund (SDRF). But the Centre has not followed the guideline. As a result, Odisha has received Rs 266 crore less under the SDRF as the Centre adopted 75:25 ratio instead of the recommended 90:10 ratio. The State Government has lodged a strong protest and demanded sanction of the remaining fund to Odisha, he said. 

He said the Centre in its explanatory memorandum stated that the previous sharing pattern of 75:25 ratio will continue till implementation of Goods and Service Tax (GST). The Centre will follow the FFC recommendation only after implementation of the GST.

“Meanwhile, the GST has been implemented since July, 2017. Therefore, the Centre sanctioned funds under SDRF at the sharing pattern of 90:10 for 2018-19 fiscal. However, later they (Centre) deducted the amount after making a calculation on the sharing pattern of 75:25 ratio,” Pujari said, claiming that the State has lost Rs 266 crore.

The Minister said after the State Government wanted to know the reason behind this, the Ministry of Finance replied in a letter on July 11, 2018 that the 75:25 ratio will continue till GST is stabilised. He pointed out that there was no mention of ‘GST stabilisation’ in the FFC’s recommendation which was presented in the Parliament. 

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