KCR puts the spotlight on cooperative fiscal federalism

V Rishi Kumar Hyderabad | Updated on February 20, 2019 Published on February 20, 2019

K Chandrasekhar Rao

Says resolution on Niti Aayog had raised hopes that states would be made equal partners in country’s development

Telangana Chief Minister K Chandrasekhar Rao  has reiterated  his resolve to work towards promoting cooperative fiscal federalism which  encourages States to become equal partners with the Centre.

Interacting with the touring members of the Fifteenth Finance Commission headed by NK Singh here, the Chief Minister said,  “The Cabinet Resolution setting up the NITI Aayog generated hopes of building Team India, making States equal partners in the nation’s development and promoting cooperative fiscal federalism.”

Decentralised planning

The Resolution, he said, also stated categorically that the one-size-fits-all approach needed to be re-worked  and planning decentralised  as centralised planning  had the potential to create needless tensions between the Centre and the States.

Rao felt that as a Constitutional institution for the transfer of resources to States, the  Finance Commission has a decisive role in taking these imperatives forward and paving the way for  reforms in Indian federalism in consonance with changing realities. “We are not against preferential treatment to  backward States. We are worried  that higher weightage to equity parameters has not served its purpose. Income inequalities across States have been increasing and the performing States are feeling discriminated against,” Rao said.

Referring to devolution issues and borrowing cap, the Chief Minister urged the Finance Commission to recommend continuation of the facility of additional borrowings over and above the 3 per cent of GSDP limit to States which are fiscally prudent and have shown improvement in their own revenue collections.

This will  help the States  put their ongoing projects on fast track and to reduce cost and time overruns. The Commission may consider raising the additional borrowings facility to 1 per cent of GSDP.

Referring to the ₹80,000-crore Kaleshwaram lift irrigation project, the Chief Minister called upon the Commission to recommend financial support for the  mega project. On similar lines, the State Chief Minister also wanted the Commission to provide a grant of ₹12,722 crore for Mission Bhagiratha.

The State also raised several issues that the Commission could consider in its recommendations.

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Published on February 20, 2019
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