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Punjab to get Rs 1,000 crore additional funds from Centre

Friday, Feb 27, 2015,19:10 IST By metrovaartha A A A

Chandigarh | The Punjab government today said the net addition in the funds from the Centre to the state will be about Rs 1,000 crore in view of 10 per cent increase in states’ share in union taxes to 42 per cent. The overall increase in share from central taxes will be Rs 3,000 crore.
However, we think that funding through some of the centrally-sponsored schemes will be stopped to states which will impact the overall funding from the Centre. Therefore, the net addition in the funds to us will be about Rs 1,000 crore, Punjab Finance Minister Parminder Singh Dhindsa said here today. Dhindsa said there will be a cut in the release of a sum of about Rs 2,000 crore after funding through some of the centrally-sponsored schemes are stopped.
At present, Punjab receives about Rs 5,000 crore as states’ share from central taxes. The Centre had accepted the recommendation of 14th Finance Commission which suggested a record 10 per cent increase in states’ share in central taxes to 42 per cent. The Punjab government has also pitched for its inclusion in the list of states which will get revenue-deficit grant. 11 states, including Himachal Pradesh, Jammu and Kashmir, Kerala, Andhra Pradesh will get revenue-deficit grant as per 14th Finance Commission recommendations. But Punjab was not included in this list, he said.
Punjab Chief Minister Parkash Singh Badal, in a meeting with Union Finance Minister Arun Jaitley yesterday, had raised the revenue-deficit grant issue. The state government is of the view that the report submitted by the 14th Finance Commission failed to take due cognisance of these facts and has ignored the state’s requirement of revenue-deficit grant.
The debt to GSDP ratio of the state continues to be high at 32 per cent while the state spends 23 per cent of its revenue receipts on interest payments. The state government is also seeking from the Centre some relief by reimbursing Rs 2,684 crore repaid by the state against the principal and interest of the special term loan provided by the Centre during the period of militancy. The rest of this special term loan has already been waived.