Finance Minister Nirmala Sitharaman on Friday said that the funds devolved to states in 45 months under the 15th Finance Commission are equal to the funds devolved to states in 60 months under the 14th Finance Commission. He said it exceeded the total amount.
She chaired the pre-budget consultation meeting with the Union Territories and Parliament. A statement released by the Ministry of Finance said that a “sound macroeconomic environment, strong economic conditions and efficiency in tax collection” have made greater decentralization possible. The meeting was attended by Finance Minister Pankaj Chaudhary and Chief Ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya and Odisha. Deputy Chief Minister of Arunachal Pradesh, Bihar, Madhya Pradesh, Rajasthan and Telangana. Ministers of Finance, Cabinet Ministers, Directors of Economic Expenditure Departments, Ministry of Finance, and senior officials of the State/Union Territories and Federal Governments.
SASCI scheme
Sitharaman also referred to the State Special Assistance Scheme for Capital Investment (SASCI), which was first announced in the Union Budget 2020-21, and acknowledged that the scheme has received very good response from countries. The states have requested the central government to increase spending under the scheme as it will lead to construction of important capital assets in the states.
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“She said the Center has allocated an additional amount of around Rs 30,000 crore as “unaffiliated funds” under SASCI-2024-25. This allocation may be used by the state government to further increase spending on capital asset creation in all sectors,” the statement said.
Further, the Union Finance Minister, based on the assessment of the Inter-Ministerial Central Team (IMCT) on behalf of the Ministry of Home Affairs (MHA), said that the Center will create additional allowances under SASCI for states affected by severe disasters. He said he did. This will help the state rebuild damaged infrastructure such as roads, bridges, water supplies, utility poles, and culverts.
“States hit by natural disasters of severe nature (as assessed by IMCT) in 2024-25 may be eligible to receive up to 50 per cent of the allocation under Part 1 (Untied) of the SASCI scheme. “This amount is in addition to the funds provided under the National Disaster Response and Mitigation Fund (NDRMF),” the statement said.
disaster aid to states
Goa Chief Minister Pramod Sawant said the state is seeking more funds for disaster management and rail connectivity. The state has also requested addition of Vande Bharat Express. West Bengal Finance Minister Chandrima Bhattacharya said the Union Finance Minister had said that funds would be allocated to all states for disaster mitigation.
Mr. Bhattacharya requested that 50% of the 50-year interest-free loan be linked to disaster management to provide relief to states that frequently face natural disasters. West Bengal also called for a special debt package to overcome financial stress. Telangana deputy chief minister Malu Bhatti Vikramarka said the Center should give flexibility to states in the use of CSS funds and not be fixated on branding. He also demanded that the Andhra Pradesh Bifurcation Act be fully implemented so that Telangana gets all its rights under the Act.
Regarding the GST rate changes, he said, “The tax system should be more flexible and less burdensome to the people. We will announce our views tomorrow.”
Punjab Finance Minister Harpal Singh Cheema called for incentives for states that share borders with neighboring states.
