Assuring parliament that no state would be shortchanged in the federal distribution of finances, union Finance Minister Arun Jaitley on Wednesday assured states with special problems that their interests would be fully safeguarded.
He cited the instances of Odisha, Punjab and Andhra Pradesh in this regard while speaking on the government’s supplementary demand for grants in the Lok Sabha.
“In Punjab, canal irrigation has been under pressure for years, with no investments for increasing capacity of the canals,” Jaitley said.
“It is in our interest to increase irrigation capacity in the foodgrain bowl of India,” the minister said, noting that the government will spend Rs.50,000 crore from the union budget over the next five years on irrigation under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY).
Regarding Odisha, Jaitley said its receipts under the 14th Finance Commission (FC) would more than double to Rs.180,796 crore, compared to the Rs.68,119 crore the state had received under the 13th Finance Commission.
“Andhra Pradesh has suffered from the bifurcation of the state. In the first year, we have been trying to help it to cover its losses (from separating Telangana),” Jaitley said.
“We will continue to support Andhra Pradesh in every way, whether it’s about its revenue deficits, and also in ways so that industry can come to the state,” he added.
The 14th Finance Commission has recommended a record 10 percent increase in the states’ share in the divisible pool of taxes to 42 percent, which will give the states an additional Rs.178,000 crore in 2015-16.
The commission also recommended a grants-in-aid of Rs.48,906 crore for 11 revenue deficit states for 2015-16.
The total devolution to the states in 2015-16 will be Rs.526,000 crore, representing an increase of Rs.178,000 crore over 2014-15.