14th FC recommends Rs 1.84 lakh crore for Odisha in 2015-20

The 14th FC has suggested raise in share of states in central taxes from 32% to 42%

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The 14th Finance Commission (FC) has recommended Rs 1.84 lakh crore for Odisha towards share in central taxes and duties for 2015-20 period, 165 per cent jump over Rs 69,316 crore recommended by the 13th FC.

The 14th FC has suggested raise in share of states in central taxes from 32 per cent to 42 per cent. But the share of Odisha in the divisible pool has come down from 4.77per cent to 4.64 per cent due to the revised criteria adopted by the 14th FC.

The decrease in relative share of Odisha is due to deletion of the fiscal discipline criterion and addition of new criterion called demographic change (population as per 2011 Census). Had the share of Odisha been maintained at 4.77 per cent, the state would have been eligible for Rs 4,613.82 crore more than the amount recommended by the commission.

The commission has recommended local body grants to the tune of Rs 10,622.79 crore. This includes Rs 8,850.31 crore for panchayati raj institutions and Rs 1,772.48 crore for urban local bodies (ULBs), finance minister Pradip Kumar Amat said in a written reply to the state assembly.

The size of the State Disaster Relief Fund has been pegged at Rs 4,130 crore for 2015-16 to 2019-20 of which the Centre and the state government will contribute Rs 3,717 crore and Rs 413 crore respectively in the ratio of 90:10.

The 14th FC has discontinued the sector specific grants like grants for the forest sector, maintenance of roads and bridges, grants for elementary education and grants for improvement in justice delivery. The commission has also desisted from recommending state specific grants. Such grants were an important instrument in the overall scheme of transfers taking into account the cost disabilities of relatively poor states that were not adequately captured in the devolution formula.

The Odisha government had projected a total requirement of Rs 51,549 crore towards maintenance grants, Rs 23,679 crore towards upgradation and state specific grants and Rs 8,925 crore for disaster mitigation. These demands have not been considered by the commission.

Similarly, the state's demand for continuance of forest sector grants, grants for elementary education and justice delivery have been ignored. Since these are need based expenditure, withdrawal of these grants will require additional allocation from the state's own resources.

The 14th FC has recommended total grants of Rs 537,354 crore in favour of states during 2015-20 out of which Odisha's share is Rs 14,339.79 crore.