Govt non-committal on granting special category status to any state

NEW DELHI, 29 Mar:  The Centre on Wednesday remained non-committal on granting the Special Category Status to any state, saying the 14th Finance Commission has not made any distinction between the general category and special category states and it has increased the net shareable taxes to all states substantially.

The written reply of the Union Minister of State for Home Nityanand Rai came in response to YSR Congress member V Vijayasai Reddy’s question on whether the government has announced that henceforth no special category status would be given to any state.

“The Fourteenth Finance Commission (FFC) had not made any distinction between general category states and special category states in the horizontal distribution of shareable taxes amongst the states,” he said.

The minister said as per the recommendations of the FFC, the Union government had decided to increase the share of net shareable taxes to the states from 32 per cent to 42 per cent for the period 2015-20.

He said the same has also been retained by the Fifteenth Finance Commission at 41 per cent (1 per cent adjusted on account of creation of UT of Jammu and Kashmir) for the period 2020-21 and 2021-26.

“The objective has been to fill the resource gap of each state to the extent possible through tax devolution. Also, Post-Devolution Revenue Deficit Grants have been provided to states where devolution alone could not cover the assessed gap,” he said.

Rai said the central government has agreed to give special assistance to Andhra Pradesh to make up for the additional central share the state might have received during 2015-16 to 2019-20, if the funding of centrally sponsored schemes would have been shared at the ratio of 90:10 between the centre and the state.

The special assistance is to be provided by way of repayment of loan and interest for the Externally Aided Projects (EAPs) signed and disbursed during 2015-16 to 2019-20 by the state, he said.

For the eight Northeastern states, Himalayan states of Uttarakhand, Himachal Pradesh and UT of Jammu and Kashmir, Rai said, as per the recommendations of the sub-group of chief ministers on the rationalization of centrally sponsored schemes, the sharing pattern of funding of core schemes under the centrally sponsored schemes is 90:10 between the centre and the state.

For the rest of the states, the sharing pattern is 60:40, he said. (PTI)