The Andhra Pradesh Government today welcomed transfer of 42 per cent of divisible pool to the States, including taxes and grants as per the Fourteenth Finance Commission recommendations. While welcoming higher tax devolution, Yanamala Ramakrishnudu, State Minister for Finance and Planning, said it will help the States to have more autonomy in designing the schemes of their own basing on their development agenda.
Commenting on the Finance Commission recommendations, he said the change in the pattern of Centrally sponsored schemes with States sharing a higher fiscal responsibility for their implementation may cast higher financial burden on the State, diverting considerable amounts from out of the amounts devolved. To such an extent, the freedom of the States to implement their own development agenda basing on the local needs may be adversely affected.
The State welcomed Government of India move to accept the recommendation of the FFC to allocate Rs 22,113 crore to residuary Andhra Pradesh state to meet it financial requirements. These funds will be allotted to adjust the revenue deficit spanning five years (2015 to 2020).
The State lauded the compensation scheme of 100 per cent to be paid to the States in the first, second and third years, 75% in the fourth year and 50 % compensation in the fifth and final year after GST roll out.
Ramakrishnudu said the special grants in aid to AP along with other 10 revenue deficit States was a good move.
He said, "The higher devolution has not come free of conditions, as I understand, in as much as 8 Centrally Sponsored Schemes are going to be transferred to the states."
He said, "We will try to convince the Centre to the view that AP needs more funds than what are contemplated."