Finance Minister Nirmala Sitharaman on Friday said that funds devolved to States in 45 months under the 15th Finance Commission exceeded the total funds devolved during 60 months under the 14th Finance Commission.
She was chairing pre budget consultation meeting with and Union Territories (with Legislature). Higher devolution was possible because of a “healthy macroeconomic environment, buoyancy and efficiency in the tax collections,” a statement released by the Finance Ministry said. The meeting was attended by Minister of State for Finance, Pankaj Chaudhary, Chief Ministers of Goa, Haryana, Jammu and Kashmir, Meghalaya and Odisha; Deputy Chief Ministers of Arunachal Pradesh, Bihar, Madhya Pradesh, Rajasthan and Telangana; Finance Ministers, Ministers, Secretaries of Departments of Economic Affairs and Expenditure, Ministry of Finance and Senior Officers from the States/Union Territories and the Union Government.
SASCI scheme
Sitharaman also referred to the Scheme for Special Assistance to States for Capital Investment (SASCI), which was first announced in the Union Budget 2020-21, and acknowledged that it has received a very good response from the States. The States have been requesting the Central Government to enhance the outlay under the Scheme as it is leading to the construction of crucial capital assets in the States.
“She stated that the Centre has allocated an additional amount of approximately ₹30,000 crore as ‘Untied Funds’ under the SASCI-2024-25. This allocation may be used by the State Governments in any sector to further increase expenditure on creation of capital assets,” the statement said.
In addition, the Union Finance Minister stated that the Centre has created an additional dispensation under SASCI for the States affected by severe disasters as assessed by the Inter-Ministerial Central Team (IMCT), deputed by the Ministry of Home Affairs (MHA). This will aid the States in reconstructing the damaged infrastructure, such as roads and bridges, water supply lines, electricity poles, culverts, etc.
“The States which suffered a natural disaster of severe nature (as assessed by IMCT) in FY 2024-25 may be eligible for up to 50 per cent of their allocation under Part-1 (Untied) of the SASCI scheme. This amount will be in addition to the funds provided under the National Disaster Response and Mitigation Fund (NDRMF),” the statement said.
Disaster aid for states
Goa Chief Minister Pramod Sawant said the state has sought more funds for disaster management and rail connectivity. The state also demanded additional Vande Bharat Express. West Bengal Finance Minister Chandrima Bhattacharya said the union finance minister has said that funds will be allotted to all states for disaster mitigation.
Bhattacharya requested that 50 per cent of the 50-year interest-free loans be tied to disaster management to mitigate the state that frequently faces natural disasters. West Bengal also demanded a special debt package to help it overcome financial stress. Telangana Deputy Chief Minister Mallu Bhatti Vikramarka said the Centre should give states flexibility in using CSS funds and not insist on branding. He also demanded that the Andhra Pradesh Bifurcation Act be implemented fully so that Telangana gets all its rights under the act.
On the GST rate rejig, he said, “The taxation system should be more flexible and not be a burden on people. We will present our views tomorrow.”
Punjab Finance Minister Harpal Singh Cheema demanded an incentive package for states that share borders with neighbouring countries.
