Telangana’s arguments over tax devolution by Centre resonates in Tamil Nadu

Hyderabad: The Telangana’s argument over the Central government’s poor and unfair tax devolution to States, especially those contributing to the national GDP in a big way, has found resonance in Tamil Nadu. Former union Minister A Raja on Sunday reportedly castigated the BJP government at the Centre for working against the federal spirit of the […]

Hyderabad: The Telangana’s argument over the Central government’s poor and unfair tax devolution to States, especially those contributing to the national GDP in a big way, has found resonance in Tamil Nadu.

Former union Minister A Raja on Sunday reportedly castigated the BJP government at the Centre for working against the federal spirit of the country. Tamil Nadu, he pointed out, contributes 10 per cent of the nation’s overall GST income and 6.5 per cent of its total tax revenue, and in return, the State gets less than 1.2 per cent which is against the federal system.

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Raja’s remarks came him in the presence of Tamil Nadu Chief Minister MK Stalin at a meeting of DMK leaders at Namakal. Telangana Chief Minister K Chandrashekhar Rao and Industries Minister K T Rama Rao, as is well known, have been repeatedly questioning the Central government over disproportionate tax sharing with States.

The BJP government had collected a whopping Rs 3,65,797 crore as taxes between 2014-15 and 2020-21 from Telangana. The State received just Rs.1,68,647 crore through devolution of funds and other grants as per Constitutional provisions. The taxes collected by the Centre from Telangana include income tax, central excise, customs duty, service tax and GST. The Centre, however, has not furnished complete data pertaining to the financial years 2019-20 and 2020-21.

 

Contrary to facts, State BJP leaders have been claiming that the BJP government had allocated over Rs 2 lakh crore to Telangana. Countering these charges at a party programme in Hanamkonda in April this year, Rama Rao had demanded that the Central government explain to the people the details of the Rs 2 lakh crore allegedly paid to the State.

The Minister had categorically stated then that the taxes collected by the Central government from Telangana was about Rs 3,65,797 crore and in return, got only Rs 1,68,647 crore. “The BJP has done nothing for Telangana and the BJP leaders are defaming TRS by dishing out inflated statistics on sanction of funds to the State,” he said.

Rama Rao, time and again has vociferously pointed out the Central government’s disproportionate tax devolution practice. In 2020, during the GHMC elections campaign, the Minister had accused the Centre of utilising taxes collected from Telangana for laying roads in Gujarat, Bihar and Uttar Pradesh. Apart from the huge gap in taxes collected from Telangana and amount devolved to the State, the Central government also owes nearly Rs 7,183 crore to the State payable on various heads of accounts as per Constitutional provisions, he said.