State seeks over 3 lakh crore from fin panel; ‘special status' unlikely

Time of India

6 days ago

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Ranchi: Jharkhand on Friday placed a cumulative demand of Rs 3,03,527.44 crore for various projects spanning 23 departments for the next five years before the 16th Finance Commission.
The demand was placed before the 11 members of the commission, who are here on their final day of the four-day tour of the state on Friday The members, however, indicated that the state's demand for a "special status" would be unlikely.
In his presentation before the commission team headed by its chairman Arvind Panagariya, state finance minister Radha Krishana Kishore listed out falling revenues due to the implementation of the GST, delayed and non-payment of central grants and other dues for years, which is making it difficult for the administration to fast-track development of the state.
The Jharkhand govt has also proposed an increase in the devolution of funds from the existing 41% in "vertical devolution" to 50% for the states and has gone on to suggest that the devolution of grants must also be considered based on revenue losses of a state because of the GST.
Citing how GST is impacting the state revenues, Kishore said after July 2022, states have stopped receiving GST compensation from the Centre. "Jharkhand is less of a consumer and more of a producer state but GST being a use-based tax system, we have to bear its loss.
Based on the current trends, a loss of about Rs 61,677 crore is estimated in the next five financial years from 2025-26 to 2029-30. Therefore, we expect the finance commission to keep this in mind and provide additional grants so that we can deal with the losses," he stressed.
The minister also highlighted how out of the proposed Rs 1.5 lakh crore to Jharkhand by the 15th Finance Commission for the development of various sectors, the state has only received Rs 12,398.02 crore for sectors like rural roads, culverts, disaster management, urban development and health.
Meanwhile, Panagariya told the media that the commission had heard all views and would make final recommendations to the Union govt for the devolution of funds over the next five years after meeting all state govts. "Jharkhand is our 27th visit and Uttar Pradesh will be the last one," he said, after the deliberations with different stakeholders in the state, including the govt representatives.
On state's demands and suggestions for devolution of funds between the Centre and the state, Panagariya said, "Under 15th Finance Commission, 15% weightage was given to the population of a state to grant funds, which Jharkhand demanded to increase it to 17.5%.
Similarly, it demanded 50% weightage on per capita as Jharkhand is among the lowest in this segment in the country. It, however, came up with an interesting and creative demand of 2.5% weightage based on GST losses.
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Asked about state govt's regular demand for a "special status", the commission member said it is unlikely to happen. "It is because special status was in practice when the planning commission existed. After it got dissolved and Niti Aayog came into being, no such criteria exist," he added.
On the other hand, state water resources and excise department minister Yogendra Prasad said, "We (govt) have apprised the commission members in detail about our needs, challenges and requirements across different sectors. We are optimistic of a suitable response in the coming days," Prasad told reporters.