Orissa seeks Rs 2,20,782 crore Central assistance from 13th finance panel

The Orissa government has sought devolution of Rs 2,20,782.86 crore Central funds over a period of 5 years starting from 2010 in its memorandum to the 13th Finance Commission currently visiting the state.

The state government has sought Rs 1,32,141.64 crore as pre-devolution non-plan revenue deficit grant, Rs 40,572.69 crore maintenance grant, Rs 1032.7crore equalisation grant under education sector, Rs 648.86 crore in health sector and Rs 16,387.36 crore grant for upgradation and state specific needs.

Besides, it has sought Rs 4000 crore grant for disaster management, Rs 7431.64 crore for disaster mitigation, Rs 655.5 crore for creation and rehabilitation of environmental assets, Rs 1450 crore for scientific management of forests and Rs 16462.47 crore for the local bodies. The 3rd State Finance Commission headed by Dr. Sudhakar Panda had recommended for transfer of Rs 16,462.47 crore to the local bodies in the state.

For vertical transfer, the state government has requested the 13th Finance Commission to consider transfer of 50 percent of the net proceeds of the Central taxes to the state. The Commission was urged to lay down norms for cost of collection of Union taxes and duties. It also pleaded that any surcharge continuing beyond 1 year should be made a part of the divisible pool.

Similarly, the export duty on iron and chrome ore should be passed on fully to originating state to compensate for pollution, depletion of natural resources and other negative externalities.

While deciding the horizontal transfer, the state has demanded 50 percent weightage for population below the poverty line (BPL), 20 percentage weightage for infrastructure index, 20 percent weightage for fiscal discipline and 10 percent weightage for the population belonging to scheduled caste and scheduled tribes.

In its submission to the Commission, the government requested for continuance of the debt relief scheme including the repayment of loans availed from National Small Savings Fund (NSSF), lowering of the interest rate on NSSF loans to 7.5 percent after consolidation of outstanding Governemnt of India (GoI) loans including loans taken from NSSF and limiting interest rate charged on old externally added projects (EAPs) to 7.5 percent instead of 9 percent at present.

Besides, it has urged the Commission to consider waiving 10 percent of the consolidated debt stock relating to the GoI at the end of each fiscal or writing off 50 percent of the debt stock relating to GoI at the beginning of the award period.

Interestingly, the state government's projection of requirement for 5 years, starting from April 2010 to 31 March 2015, is about 234 percent higher than the projection of Rs 65932.17 crore made before the Twelfth Finance Commission.

While the state government had sought Rs 65,932.17 crore from Twelfth Finance Commission, the latter had awarded Rs 37,342.56 crore to the state under different heads.

This included Rs 31669.47 crore as shared taxes, Rs 2678.89 crore as special and equalisation grant, Rs 1599.16 crore as calamity relief fund (CRF) grant, Rs 803 crore as grant for rural local bodies (RLBs) and Rs 104 crore as grant for urban local bodies (ULBs.).