Hyderabad: Telangana’s deputy chief minister Bhatti Vikramarka has urged the central government to grant greater autonomy to economically progressive states for borrowing.
He emphasized the need to increase the states’ share in central taxes to 50% and called for a reduction in the cess and surcharges imposed by the central government.
Additionally, he demanded that the central government allow states to utilize funds according to local priorities instead of adhering strictly to centrally sponsored schemes.
Vikramarka made these statements during a conference of finance ministers from five non-BJP-ruled states held in Thiruvananthapuram, Kerala, on Thursday, September 12.
Bhatti calls for balance of power
He highlighted the importance of maintaining a balance of power between the central and state governments, advocating for a more equitable distribution of financial resources to support state-level initiatives and development projects.
“The central government’s dominance has hindered adequate funding for state development, diverging from the objectives of the Constitution’s framers. The decision by the 14th Finance Commission to increase states’ share in central taxes from 32% to 42% has been misleading, as it merely simplified regulations without a genuine increase in resources. The central government is not sharing the revenue from cesses and surcharges, which has led to a significant increase in its gross tax revenue by 28%. Consequently, states are facing substantial cuts in their funding. Moreover, delays in GST compensation have adversely affected the financial situation of states, preventing them from formulating budgets that align with their capacities. This lack of resources is obstructing development programs,” he said.
The Finance minister further said that despite southern states constituting only 19.6% of the population, they contribute significantly to the economy, providing 30% of the GDP.
“However, the Finance Commission has reduced their share of tax distribution from 21.073% to 15.800%. Centrally sponsored schemes are not only restricting the autonomy of states but also imposing stringent regulations and matching grant conditions that adversely affect state budgets. As a result, states are forced to allocate funds from their own resources according to central conditions, diverting money from priority sectors,” he added.
On Lok Sabha delimitation
Speaking further, he expressed alarm over the proposal to redraw constituency boundaries as per the 2011 census population figures and said that the political representation of southern states in the Lok Sabha will diminish because of the idea.
“This situation must be avoided, as states that prioritize population control and social development could be unjustly penalized,” he said.
Bhatti suggested that India should adopt a system similar to the United States, where the number of representatives in the House of Representatives has been capped at 435 for over a century.
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