Business Standard

Centre not implementing FC recommendation on sanction of funds


Press Trust of India Bhubaneswar
Odisha Finance Minister Niranjan Pujari on Monday said the state government has strongly protested the Centre's act of "not implementing" the Finance Commission recommendation on sanction of funds under SDRF.
Pujari said this in the Assembly while replying a question of BJD member Ashwini Kumar Patra. He said though the 14th Finance Commission had recommended that the sharing pattern between the Centre and the state will be 90:10 ratio while sanctioning funds under State Disaster Response Fund (SDRF), but the Centre has not being following the guideline.
As a result Odisha has received Rs 266 crore less under the SDRF as the Centre adopted 75:25 ratio instead of 14th FC's recommendation of 90:10 share ratio, he said.
"We have strongly protested this act of the Centre and demanded sanction of remaining Rs 266 crore to the state," Pujari said.
The Odisha Finance minister said though the 14th FC said that the share between the Centre and states will be 90:10 ratio, the Centre in its explanatory memorandum said that the previous sharing pattern of 75:25 ratio will continue till implementation of Goods and Service Tax (GST).
The Centre will follow the 14th FC's recommendation only after implementation of the GST, the memorandum said.
"Meanwhile, the GST has been implemented since July 2017. Therefore, the Centre sanctioned the funds under SDRF at the sharing pattern of 90:10 for the 2018-19 fiscal. However, later they (Centre) deducted the amount after making a calculation on the sharing pattern of 75:25 ratio," Pujari said, claiming that the state has lost Rs 266 crore.
The state government drew attention of the Centre and wanted to know the reason behind making calculation on 75:25 ratio even after implementation of the GST, Pujari said.
"The Ministry of Finance in a reply letter dated July 11, 2018 said that the 75:25 ratio will continue till GST is stabilised," he said.
However, Pujari pointed out that there was no mention of "GST stabilisation" in the FC's recommendation which was presented in the Parliament. "There was no mention of GST stabilisation in the FC's recommendation. However, it was said that the 90:10 ratio will be given after implementation of the GST," he said.
Pujari said the state government has raised this issue in different forums like Inter-State Council, NITI Aayog and the Central government's pre-budget discussion.
Meanwhile, the Odisha Finance minister said the state has also received less Central assistance of Rs 17,299 crore than the approved amount during the last four fiscal from 2015-16 to 2018-19 towards state's share in the central taxes.
The finance minister said the 14th Finance Commission had recommended Rs 1,84,070 crore to Odisha as its share from the central tax between 2015-16 and 2019-20. The state's share was Rs 1,35,820 crore in four fiscal from 2015-16 to 2018-19.
"However, we have so far received only Rs 1,18,521 crore, which is Rs 17,299 crore less," Pujari said.
He further pointed out that though it has been recommended to sanction Rs 48,250 crore as the state's share in the Central taxes in 2019-20 fiscal, the Centre in its budget has estimated only Rs 37,560 crore, which is again less by Rs 10,690 crore than the recommended amount.

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First Published: Jul 29 2019 | 6:40 PM IST

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