Cut in tax devolution to states ‘unfair’, says Naveen

Bhubaneswar: Terming the 3.5% cut in tax devolution to the States in the revised estimate in the Union Budget for 2016-17, presented by Union Finance Minister Arun Jaitley in the Lok Sabha on Monday, as ‘unfair’, Odisha Chief Minister Naveen Patnaik has said the finances of Odisha will be overtaxed on account of less than anticipated transfer of resources from the Centre.

Talking to media persons, Patnaik said, “Depriving the States of their legitimate share is rather unfair. The finances of our state will be stretched on account of less than the anticipated transfer of resources from the Centre.”

Noting that net tax revenue of the Centre has been projected to increase by about 3 percent from Rs 9.20 lakh crore in the Budget Estimates for 2015-16 to Rs 9.48 lakh crore in the Revised Estimates for 2015-16, Patnaik added, “The tax devolution to the States has gone down by about 3.5 percent in the Revised Estimates.”

“This is indicative of the fact that the Centre is depriving the States of their share through levy of cess and surcharge, which do not form a part of the sharable pool,” he added.

Comparing the actual allocation vis a vis the recommendations of the Fourteenth Finance Commission for this year and the last, he said, “The share of Odisha wa less by about Rs 3,500 crore in 2015-16 and by Rs 4,600 crore in 2016-17 from the recommended level.”

He added, “While looking back, the state government has taken the right decision to place its budget after presentation of Union Budget; otherwise it would have been an impractical guess work.”

Mentioning the allocation of more than Rs 6,500 crore for Water Resources in the State Budget last year, Patnaik said, “However, it is hugely disappointing to note that there has been an insignificant increase under Pradhan Mantri Krishi Sinchai Yojana (PMKSY), the flagship irrigation scheme of Government of India, from Rs 5,300 crore to Rs 5,700 crore only for the entire country.”

He also said, “I am not able to understand the logic behind the huge cut in allocation for both primary and higher education sectors.”

Pointing out stagnancy in the allocation for tribal welfare under Article-275(1) and TSP, the Chief Minister said, “From the point of view of Odisha, this is a huge disappointment.”

However, Patnaik welcomed the enhanced allocation for agriculture, housing, drinking water and sanitation, urban development livelihood improvement programmes and road Infrastructure sectors. “This is in sync with our own priorities,” he added.