Telangana seeks special grant from Centre
Hyderabad: Telangana on Thursday urged union Finance Minister Nirmala Sitharaman to honour the 15th Finance Commission’s recommendations, revive Information Technology Investment Region (ITIR) and accord National Project status to Kaleshwaram and Palamuru-Rangareddy projects. It pointed out that National Project status has not been accorded to any irrigation project in Telangana despite numerous requests, a top […]
Hyderabad: Telangana on Thursday urged union Finance Minister Nirmala Sitharaman to honour the 15th Finance Commission’s recommendations, revive Information Technology Investment Region (ITIR) and accord National Project status to Kaleshwaram and Palamuru-Rangareddy projects.
It pointed out that National Project status has not been accorded to any irrigation project in Telangana despite numerous requests, a top Finance Department official said reading out from Finance Minister T Harish Rao’s speech at the pre-budget meeting with the union Finance Minister.
“Telangana is stretching its resources to the hilt to complete the projects. I request National Project status be granted to either Kaleshwaram or Palamuru-Rangareddy lift irrigation scheme,” he said.
The State said the 15th Finance Commission had noted that tax devolution was projected to decline in absolute terms from 2019-20 to 2020-21 for Telangana. As the decline in the absolute amount of tax devolution had not been observed in the dispensation of any previous Finance Commission, the Commission recommended a special grant amounting to Rs 723 crore to Telangana in 2020-21.
However, in an unprecedented manner, the Centre had asked the Finance Commission to review this recommendation. Never in the history of Finance Commissions had the Commission been asked to review its recommendation, he said.
Regarding development of backward areas in the State, Centre had sanctioned Rs 450 crore per annum (Rs 50 crore each for nine of the then 10 districts). These 9 districts were earlier covered under the BRGF (terminated from 2015-16). The grants for the years 2019-20 and the current year amounting to Rs.900 crore were yet to be released, he said.
Further, since the formation of Telangana, the number of districts has gone up from 10 to 33 and subsequently, the number of backward districts has gone up from 9 to 32. There is a need to develop infrastructure facilities in the newly formed districts.
For promotion of industrialisation and economic growth in the State, except for minor concessions in depreciation rates, no major tax concession has been offered to Telangana. The union government should announce tax concessions as mandated in the AP Reorganisation Act.
The Central government had cleared Information Technology Investment Region (ITIR) in 2014 and since then there was no assistance. To promote investments into IT industry, this project needs to be revived by the Centre.
In the first year of the Telangana formation, CSS grants amounting to Rs. 495.21 crore meant for State were wrongly released to Andhra Pradesh by the Central Ministries.
Establishment of Tribal University, Integrated Steel Plant and Rail Coach Factory assured under AP Reorganisation Act are still pending, besides proposals for improving rail connectivity.
On the national perspective and issues concerning all the States, Harish Rao stressed that union Budget needs to address the structural factors inhibiting the growth of investment in the country.
Production Linked Incentive (PLI) scheme needs to be tweaked to ensure that large scale industries do their sourcing from MSMEs and the benefit of PLI is also passed on to them. Extension of PLI to MSMEs with significant allocations will result in employment creation, he suggested.
The union Finance Minister’s commitment to frontload capital expenditure is a welcome move. The most important way of doing so was to relax the FRBM limit by 2 percentage points of GSDP subject to the condition that the additional borrowings are entirely used for capital expenditure. Such relaxation may be continued until economic recovery is secure.
Under the Scheme of Financial Assistance to States for Capital Expenditure for the financial years 2020-21 and 2021-22, allocation of Rs 12,000 crore and 15,000 crore, respectively, was introduced.
The allocations under the scheme are too meagre as compared with the requirement of States. As compared with the provision of Rs.15,000 crore, the amount allocated to States in the current year is only Rs.10,000 crore and the actual releases so far are negligible at Rs.3,277 crore.
“The scheme may be continued for the next five years with an annual allocation of Rs.50,000 crore without any earmarking for monetising infrastructure assets and disinvestment as many States do not have PSUs which are suitable for such divestment,” he said.
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