HYDERABAD: Demanding that the Centre should financially strengthen the able and performing States like Telangana, IT and Industries Minister KT Rama Rao on Monday suggested that Pension Fund and Sovereign Fund be given to States towards capital investment.
Participating in a video conference Union Finance Minister Nirmala Sitharaman had with Chief Ministers and State Finance Ministers, Rama Rao also wanted a two per cent increase in the State’s borrowing limit under the Fiscal Responsibility and Budget Management (FRBM) Act.
“States are engines of growth for the country. Encourage them to compete globally, so that they will help in GDP growth. Follow the federal spirit, implement decentralisation and strength the States, which will ultimately help in country’s growth,” he said.
“Telangana is contributing five per cent to the GDP and it is the fourth largest contributor to the country’s economy. The per capita income of the State is Rs 2.37 lakh today as against Rs 1.24 lakh in 2015. The State’s GSDP is Rs 9.8 lakh crore against Rs 5 lakh crore at the time of the formation of the State,” he added.
Stating that the country’s GDP declined due to the pandemic, he wanted Sitharaman to encourage investments in the country. He urged the Centre to give certain incentives for investments in textile, garments, toys, leather and light engineering goods, so that semi-skilled people too would get employment. He also suggested productivity-linked incentives to the MSME sector, which is contributing 30 per cent to the GDP. Finding fault with the Centre for not creating healthy competition among States, he pointed out that because of shifting of defence industrial corridor from Hyderabad-Bengaluru to Bundelkhand, the expected results were delayed by three years.
He also requested the Union Finance Minister to increase tax devolution to the States from the divisible pool. He opposed the increase in cess and pointed out that the cess collection of the Centre was just 2.3 per cent of the total revenue in 1980 but it now increased to 20 per cent. Finance Minister T Harish Rao also attended the meeting.