Telangana contributes Rs 4.32 lakh crore to nation, gets just 1.84 lakh crore from Centre

The Union Finance Ministry’s data reveals that Telangana contributed Rs 4.32 lakh crore in taxes and GST between 2020-21 and 2024-25 but received only Rs 1.84 lakh crore in return through devolution and grants.

Hyderabad: The Centre’s step-motherly treatment towards Telangana has been exposed once again with its imbalance in fiscal devolution, with Telangana losing out big time among other States.

Interestingly, it was in a reply to a question raised by BJP MP Arvind Dharmapuri in the Rajya Sabha that the Union Finance Ministry admitted to having devolved only Rs 1.84 lakh crore to Telangana against Rs 4.32 lakh crore contributed by the State in five years.

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Between 2020-21 and 2024-25, Telangana contributed Rs 4.32 lakh crore in direct taxes and gross GST, which is around 3.87 percent of India’s total collections. However, during the same period, the State received only Rs 1.84 lakh crore from the Centre in tax devolution, Finance Commission grants and centrally sponsored schemes, which is a mere 2.45 percent of total Union transfers.

Ironically, the funds collected by the Centre in the form of cesses are excluded from the funds contributed and their inclusion could mean the Centre’s fund devolution to the State would be even lower.

Even high-performing States like Karnataka and Tamil Nadu which contributed around 12.66 percent and 7.61 percent respectively, received around 3.9 percent and 4.66 percent share in devolution of funds and faced similar structural discrimination. The data confirmed what Southern states have argued for a long time, that high-performing economies contribute disproportionately to the national exchequer but receive far less in return.

In contrast, Uttar Pradesh, which contributed just 4.6 percent, cornered a massive 15.82 percent of all transfers. Similarly, Bihar received 8.66 percent of devolution funds against a meagre 0.68 percent contribution, and Madhya Pradesh was given 7.4 percent of funds with a 1.94 percent contribution.