Tamil Nadu hopes for ‘fair and equitable’ devolution of Central funds under 15th Finance Commission

Our Bureau Chennai | Updated on January 06, 2020 Published on January 06, 2020

Governor Banwarilal Purohit addressing the first day of the Assembly session   -  R Ragu

This year, Tamil Nadu has so far received ₹7,096 crore as GST compensation

There has been a diminution in the overall flow of Central funds to Tamil Nadu. Contrary to the impression that the Fourteenth Finance Commission’s recommendations increased gross flow of resources from the Centre to the States, there has been a reduction in the gross transfers. Tamil Nadu has faced severe adverse impact due to the horizontal distribution formula of the Fourteenth Finance Commission, said the Tamil Nadu governor Banwarilal Purohit in his customary address in the Tamil Nadu Legislative Assembly.

This year, Tamil Nadu has so far received ₹7,096 crore as GST compensation and Central government grant of ₹17,957 crore. However, there are outstanding issues in the release of dues to the State that are being followed up closely.

Shortchanged on IGST

The Centre had incorrectly appropriated the entire unallocated portion of IGST to the tune of ₹88,344 crore to the Consolidated Fund of India. It had distributed 42 per cent of this to the States as per the Fourteenth Finance Commission’s devolution formula. This has resulted in a net loss of ₹4,073 crore to the State. “We are insisting on the immediate release of this amount due to our State. Due to our efforts, this issue has been referred to a Group of Ministers by the GST Council and we seek an early favourable decision,” he said.

Central share

Tamil Nadu is awaiting the recommendations of the Fifteenth Finance Commission. The State government has made a detailed presentation before the Commission and is hopeful of fair and equitable distribution of resources, which rewards efficiency and performance, the Governor said.

On industry, Purohit said that the Global Investors Meet held in January 2019 attracted ₹3 lakh crore worth of investment, providing employment to nearly 10.5 lakh people. Till date, 53 projects have already commenced commercial production and 219 projects are at various stages of implementation. After the GIM, 63 new MoUs have been signed, committin investment totalling ₹19,136 crore with employment potential for 83,837.

Chennai Metro

On the Chennai Metro Rail project, Purohit said that based on a feasibility study, the Centre has decided to extend the Metro Rail Corridor by 15.3 km from the Chennai airport to Kilambakkam where a new mofussil bus terminus is coming up. To address the increasing traffic congestion on the Tambaram-Velachery corridor, the State government will establish a 15.5-km rail-based transit system and the Chennai Metro Rail Ltd will prepare a detailed feasibility and project report, he said. Purohit urged the Centre to accord early approval for their participation in the phase-II project on 50:50 equity sharing model adopted for phase-I of CMRL.

During the second India-China informal summit held between Prime Minister Narendra Modi and President Xi Jinping in October 2019, Modi had promised a tourism development package for Mamallapuram and a proposal for ₹563.50 has been prepared and sent to the Centre for approval, he said.

At the summit, it was also decided that Fujian province and Quanzhou city in China will establish sister State/province and city relations with Tamil Nadu and Chennai. As a follow up, a high level Chinese delegation visited Chennai recently, he said.

Published on January 06, 2020
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