Finance Minister Nirmala Sitharaman highlighted on Friday that the funds allocated to States over the past 45 months under the 15th Finance Commission have surpassed the total allocations made during the 60 months of the 14th Finance Commission.
During a pre-budget consultation meeting attended by various stakeholders, including Chief Ministers from multiple states and senior officials, Sitharaman noted that this increased devolution is a result of a robust macroeconomic environment, improved tax collection efficiency, and economic buoyancy. The meeting included participation from Minister of State for Finance, Pankaj Chaudhary, along with Deputy Chief Ministers and Finance Ministers from various States and Union Territories.
Sitharaman also addressed the Scheme for Special Assistance to States for Capital Investment (SASCI), first introduced in the Union Budget for 2020-21, which has garnered positive responses from the States. She mentioned that States have been urging the Central Government to increase funding under this scheme due to its role in developing essential capital infrastructure.
According to the statement from the Finance Ministry, the Centre has allocated an additional ₹30,000 crore as “Untied Funds” under SASCI for the fiscal year 2024-25. These funds can be utilized by State Governments across any sector to enhance capital asset creation.
Additionally, Sitharaman announced a specialized provision within SASCI for States impacted by severe disasters, as evaluated by the Inter-Ministerial Central Team (IMCT) from the Ministry of Home Affairs. This initiative aims to assist States in rebuilding damaged infrastructure, including roads, bridges, water supply systems, and electricity lines.
States that experience significant natural disasters (as assessed by IMCT) in the financial year 2024-25 may be eligible to receive up to 50% of their allocation under Part-1 (Untied) of the SASCI scheme. This funding is supplementary to the resources provided under the National Disaster Response and Mitigation Fund (NDRMF).
Goa’s Chief Minister Pramod Sawant requested additional funds for disaster management and rail connectivity, along with more Vande Bharat Express trains. West Bengal’s Finance Minister, Chandrima Bhattacharya, indicated that the Finance Minister assured funding would be available for all states to address disaster mitigation needs. She also urged that 50% of the 50-year interest-free loans be allocated specifically for disaster management to assist West Bengal, which frequently faces natural calamities. Furthermore, she requested a special debt package to alleviate the state’s financial pressures.
Telangana’s Deputy Chief Minister, Mallu Bhatti Vikramarka, suggested that the Centre should allow States more flexibility in utilizing Central Sponsored Scheme (CSS) funds without emphasizing branding. He also called for the complete implementation of the Andhra Pradesh Bifurcation Act to ensure Telangana receives its rightful benefits.
Regarding the potential for adjustments in GST rates, he expressed that the taxation system ought to be more adaptable and should not overburden citizens. Punjab’s Finance Minister, Harpal Singh Cheema, called for an incentive package for states that border neighboring countries.
