HYDERABAD: Revealing that he was quite impressed by the state government’s development plan and its presentation, Arvind Panagariya, chairman of the Sixteenth Finance Commission, on Tuesday said that the Telangana administration was vocal about its concerns vis-a-vis the financial situation.
Panagariya spoke to reporters after meeting a state government delegation led by Chief Minister A Revanth Reddy at the Praja Bhavan. “We had a frank and open discussion with the state government on various issues. The state government was very upfront about its finances and going forward. It briefed us on all factual numbers of liabilities both Budget and off-Budget,” he said.
Stating that the panel was impressed with the state government’s development plan, Panagariya said that generally, urban development is neglected but Telangana is according priority, and is far ahead, in this aspect. He added that the commission was pleased to see the roadmap on the development of the state.
Asked whether the Commission will increase the percentage of tax devolution to states, Panagariya said that at this point of time, he was not in a position to comment on this as the panel would be considering all suggestions and come to conclusions on all issues.
Responding to the state’s concerns over the Union government not sharing the cesses collected, he said that the Centre was statutorily obligated to devolve 41% of funds from divisible pool. “There is not much the Commission can do in this issue, but it is for the state and Union governments to come into an understanding about cesses and surcharges and a Constitutional amendment is needed for this,” he said.
The 16th Finance Commission was constituted by the Centre to recommend tax devolutions, central share in CSS and other grants to all states for the five-year period — from 2026-27 to 2030-31. Telangana is the sixth state the panel visited. It had earlier visited Himachal Pradesh, Chhattisgarh, Punjab, Rajasthan and Karnataka.