The Hindu : A.P. will continue 'fight' for Central funds

Online edition of India's National Newspaper
Tuesday, May 07, 2002

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National

A.P. will continue 'fight' for Central funds

By Our Special Correspondent

HYDERABAD May 6. The Andhra Pradesh Chief Minister and Telugu Desam Party president, N. Chandrababu Naidu, will continue his "fight" against the Centre over devolution of funds to the State which have been gradually declining over the last six years.

Other States were also "victims" of the falling devolutions, he said and added that his Tamil Nadu counterpart, Jayalalithaa, had already conveyed her State's views to the Centre. "Let me assess the situation before thinking of convening a meeting of Chief Ministers'', he said.

Mr. Naidu was unhappy over the "loss" of Rs. 500 crores during the last fiscal over the previous year's Central assistance of Rs. 4,750 crores which, he admitted was mainly due to the negative all-India growth of 1.68 per cent in the collection of Central taxes. The collection of Central taxes in Andhra Pradesh (5.4 per cent) was higher than the national average.

Addressing a press conference here on Monday, he said the better performing States were being "penalised" and losing out on Central devolutions. Recalling the earlier "fight" by Chief Ministers against the allocations proposed by the Eleventh Finance Commission, he said it had led to a marginal rise in the share of the States.

Asked whether he proposed to take up the issue with the Centre during his coming visit to Delhi, he said "the only solution to this problem is fighting with the Centre by the victim States''.

The ratio of Central taxes to the total tax revenues in Andhra Pradesh had been declining from a level of 37.58 per cent in 1996-97 to 25.78 per cent in 2001-02. However, in actual terms, it increased from Rs. 2,938 crores to Rs. 4,049 crores during the period.

Mr. Naidu released a detailed account of the performance of State's revenue receipts and compared them to that of the Centre and some-better performing States such as Tamil Nadu and Maharashtra to prove his point that his Government was leaving no stone unturned to improve its revenues. Andhra Pradesh ranked fourth among the top five States in terms of own tax revenues as a percentage of the Net State Domestic Product (NSDP), he said.

At the same time, he conceded that this did not mean that the State's finances were in the pink of health. But, the situation was slowly improving and the State ended the previous year with zero overdraft.

He maintained that frequent resort to overdraft did not necessarily indicate poor fiscal management. Money was needed in certain seasons to clear huge bills for various works.

The Chief Minister held that the critical observations of the Comptroller and Auditor-General (CAG) about his Government's poor financial management had to be treated as authentic feedback and steps taken to remedy the situation.

He would not be surprised if the CAG had expressed similar views about other States, he said.

He was optimistic that the State would come out of its crushing internal and external debt by improving its GSDP.

The decline in its population growth rate, the rising per capita income and steady improvement in infrastructure had already pegged down the poverty level to 15.77 per cent compared to the national average of 26.11 per cent, he added.

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