FinCom tip brings good tidings for AP
Andhra Pradesh State government finds that the overall scenario on the financial front of the State was now encouraging following the Centre’s acceptance of the recommendations of the 14th Finance Commission. Andhra Pradesh is one among the eleven States identified as facing deficit and revenue gap
Hyderabad: Andhra Pradesh State government finds that the overall scenario on the financial front of the State was now encouraging following the Centre’s acceptance of the recommendations of the 14th Finance Commission. Andhra Pradesh is one among the eleven States identified as facing deficit and revenue gap. As part of this, AP would get Rs 22,110 crore over a period of five years. Under this head, during the 2015-16 fiscal, the State is expected to get Rs 6,690 crore, said officials of the Finance Department.
Apart from this, the State would get Rs 450 crore in grant for the State Disaster Response Force (SDRF). Earlier, the Central and State ratio for the disaster relief has been 75 per cent and 25 per cent respectively. From this financial year, it has been made as 90% (Central) and 10% (State).
The actual revenue gap till January this year stood at Rs 9,340 crore and by the end of the current financial year, it would arrive at around Rs 11,000 crore, said the officials. As such, the grant of Rs 6,690 crore is expected to reduce the revenue gap, and it would be further down, with similar grants spread over the next five years, they added.
Though the State had pitched for devaluation of Central Taxes to the States at 50 per cent, the Union Government had agreed the recommendations of the Finance Commission for the devaluation of 42 per cent of the taxes to the States. This would be another aspect that would Andhra Pradesh has to deal with to face escalating expenditure.
The State would also get grants in aid of Rs 8,650 crore for rural and Rs 3,600 crore of municipal bodies, for strengthening the civic bodies in providing basic amenities. Meanwhile, State Finance Minister Yanamala Ramakrishnudu welcomed the transfer of 42 per cent of divisible pool to the States, including taxes, grants and other benefits.