HYDERABAD: The State government is upset with the final report of the Fifteenth Finance Commission (FFC), which was tabled in Parliament on Monday. Sources in the Finance Department termed the report “unprofessional”, stating that it tried to please Prime Minister Narendra Modi by recommending more devolution to Gujarat.
Further, though the FFC recommended a State-specific grant of Rs 2,350 crore for the operation and maintenance of Mission Bhagiratha, it was rejected by the Central government.
“Keeping in mind the untied resources with the State government and the fiscal commitments of the Centre, due consideration will be given to the recommendation for State-specific grants,” the Action Taken Report by the FFC stated.
“Normally, Finance Commission reports are professional ones. But this time, it is more of a political report,” sources told Express. “How can the FFC recommend more tax devolution to Gujarat,” asked an official. They also expressed displeasure over the Centre not accepting the State-specific grants recommended by the FFC.
Though the State’s share in Central taxes was revised from 2.133 per cent to 2.102 per cent for Telangana, the FFC allowed the States to raise loans up to 4.5 per cent of the Gross State Domestic Product (GSDP) in 2021-22, and four per cent in 2022-23, which would enable them for good cash inflows.
“The Commission recommends three windows to allow for greater flexibility for the States: (a) additional unconditional borrowing space in the first two years of the award period to compensate for the loss of tax revenues; (b) an additional borrowing of 0.5 percentage of GSDP to be allowed to the States in case they meet the criteria for power sector reforms; (c) building on the FC-XIV recommendation,” the FFC report stated.
In addition to the special grant, the FFC had also recommended Rs 12 crore for revamping the Administrative Staff College of India. That too was not accepted by the Centre.