New Delhi [India] With the coalition government at the Centre, the demand for special status by states like Bihar and Andhra Pradesh is again in focus. On Modi 3.0, his two important alliance partners, JDU from Bihar and TDP from Andhra Pradesh, will be under pressure to give special status to their states.
But under the current provisions, special status does not exist for the states. With the dissolution of the 13th Planning Commission in August 2014, the 14th Finance Commission has made no distinction between special and general category states.
The government accepted the recommendations of the 14th Finance Commission and with effect from April 1, 2015, increased the tax transfer from the Center to the states to 42 per cent from the earlier 32 per cent, and also added a new provision of revenue deficit grants to the states. Difference of any resource.
Under the new provision, the total transfer to states became Rs 5.26 lakh crore in 2015-16, compared to Rs 3.48 lakh crore in 2014-15, an increase of Rs 1.78 lakh crore.The states' share is decided by a formula to encourage demographic performance and each state attempts to raise its own tax revenue. This formula also takes into account the geographical area, forest area and per capita income of the state.
The 15th Finance Commission, headed by NK Singh, has revised the tax devolution and reduced it from 42 per cent to 41 per cent after Jammu and Kashmir was carved out as a Union Territory in 2019. 41 percent by 2026.
Under the special category status, which was in force till March 2015, special category states received 90 per cent financial contribution from the Center for all centrally sponsored schemes, with the states' contribution limited to only 10 per cent.
States like Assam, Tripura, Arunachal Pradesh, Meghalaya, Manipur, Nagaland, Mizoram, Sikkim, Uttarakhand, Himachal Pradesh and Jammu and Kashmir were given special category state status before 2015.The 90:10 rule is still applicable to the North-East and hill states, although there is no special status category there. All other states receive central funding in the ratio of 60:40, with 60 per cent contribution from the central government and 40 per cent contribution from the states.
If the coalition government under Modi 3.0 decides to revisit the situation and meet the demands of Bihar and Andhra Pradesh for special category status, the proposal will be sent to the 16th Finance Commission under Arvind Panagariya for their approval or Should be sent to NITI Aayog.
Apart from Bihar and Andhra Pradesh, Odisha, Chhattisgarh and Rajasthan are also demanding special status.
It clarifies that special category status does not exist for states under the existing provisions.But, the central government has the option to provide additional financial assistance packages to states facing revenue deficit and resource deficit. Andhra Pradesh and Bihar can be given additional funds under this scheme.
On Tuesday, June 11, the Center allocated Rs 1.39 lakh crore to states as tax transfers for June. The Finance Ministry said this release is separate from the regular release of transfer amounts for the month of June. This will enable states to accelerate development and capital expenditure, the ministry said.Rs 12.19 trillion was earmarked for devolution of taxes to states in the interim budget for 2024-25. With this release, the total amount transferred to states till June 10 for 2024-25 is Rs 2.8 trillion.
The Sixteenth Finance Commission is currently working on developing the tax devolution framework for the period FY27-31. The Commission will examine the development needs and tax buoyancy trends of the states and the obligations of the Center while arriving at its recommendations.
The Finance Ministry said that in the latest round of fund release, Uttar Pradesh got Rs 25,069.88 crore, Bihar Rs 14,056.12 crore and West Bengal Rs 10,513.46 crore.Rajasthan got Rs 8,421.38 crore, while Madhya Pradesh got Rs. 10,970.44 crore.
But under the current provisions, special status does not exist for the states. With the dissolution of the 13th Planning Commission in August 2014, the 14th Finance Commission has made no distinction between special and general category states.
The government accepted the recommendations of the 14th Finance Commission and with effect from April 1, 2015, increased the tax transfer from the Center to the states to 42 per cent from the earlier 32 per cent, and also added a new provision of revenue deficit grants to the states. Difference of any resource.
Under the new provision, the total transfer to states became Rs 5.26 lakh crore in 2015-16, compared to Rs 3.48 lakh crore in 2014-15, an increase of Rs 1.78 lakh crore.The states' share is decided by a formula to encourage demographic performance and each state attempts to raise its own tax revenue. This formula also takes into account the geographical area, forest area and per capita income of the state.
The 15th Finance Commission, headed by NK Singh, has revised the tax devolution and reduced it from 42 per cent to 41 per cent after Jammu and Kashmir was carved out as a Union Territory in 2019. 41 percent by 2026.
Under the special category status, which was in force till March 2015, special category states received 90 per cent financial contribution from the Center for all centrally sponsored schemes, with the states' contribution limited to only 10 per cent.
States like Assam, Tripura, Arunachal Pradesh, Meghalaya, Manipur, Nagaland, Mizoram, Sikkim, Uttarakhand, Himachal Pradesh and Jammu and Kashmir were given special category state status before 2015.The 90:10 rule is still applicable to the North-East and hill states, although there is no special status category there. All other states receive central funding in the ratio of 60:40, with 60 per cent contribution from the central government and 40 per cent contribution from the states.
If the coalition government under Modi 3.0 decides to revisit the situation and meet the demands of Bihar and Andhra Pradesh for special category status, the proposal will be sent to the 16th Finance Commission under Arvind Panagariya for their approval or Should be sent to NITI Aayog.
Apart from Bihar and Andhra Pradesh, Odisha, Chhattisgarh and Rajasthan are also demanding special status.
It clarifies that special category status does not exist for states under the existing provisions.But, the central government has the option to provide additional financial assistance packages to states facing revenue deficit and resource deficit. Andhra Pradesh and Bihar can be given additional funds under this scheme.
On Tuesday, June 11, the Center allocated Rs 1.39 lakh crore to states as tax transfers for June. The Finance Ministry said this release is separate from the regular release of transfer amounts for the month of June. This will enable states to accelerate development and capital expenditure, the ministry said.Rs 12.19 trillion was earmarked for devolution of taxes to states in the interim budget for 2024-25. With this release, the total amount transferred to states till June 10 for 2024-25 is Rs 2.8 trillion.
The Sixteenth Finance Commission is currently working on developing the tax devolution framework for the period FY27-31. The Commission will examine the development needs and tax buoyancy trends of the states and the obligations of the Center while arriving at its recommendations.
The Finance Ministry said that in the latest round of fund release, Uttar Pradesh got Rs 25,069.88 crore, Bihar Rs 14,056.12 crore and West Bengal Rs 10,513.46 crore.Rajasthan got Rs 8,421.38 crore, while Madhya Pradesh got Rs. 10,970.44 crore.
