"No Conscious Discrimination": Finance Secretary On Centre-States Funds Row

Finance Minister Nirmala Sitharaman and Congress MP Adhir Ranjan Chowdhury sparred in Parliament over allegations non-BJP states are "deprived of their (financial) dues.

Finance Secretary TV Somanathan spoke exclusively to NDTV.

New Delhi:

Financial allocations to states - whether tax devolution or funds from welfare schemes sponsored by the central government - are based on uniform guidelines that leave no room for discrimination, Finance Secretary TV Somanathan told NDTV Tuesday afternoon in an exclusive interview.

Mr Somanathan's comments come a day after Finance Minister Nirmala Sitharaman and Congress MP Adhir Ranjan Chowdhury sparred over allegations non-BJP states are "deprived of (financial) dues.

Mr Somanathan today underlined what the Finance Minister said, explaining, "In the operation of the Finance Ministry as regards funding to states, we go by formulae that have been laid down by the Finance Commission... we have not discriminated, for or against, any state government."

"I won't go into the political aspects but I don't think there is any conscious discrimination."

He said sharing of tax revenue - distribution of GST has been a contentious issue for years, with Bengal and Punjab among states frequently claiming withholding dues - is based on percentages laid down by the Finance Commission and audited by the Comptroller and Auditor General.

These, he stressed, could not be changed and funds were distributed as per the guidelines; Ms Sitharaman made the same point yesterday, adding she could not alter them "as per my whims".

Distribution of funds for schemes sponsored by the centre are also based on fixed percentages - 60-40 in case of "mainstream" states and 90-10 for north-eastern or hill states - Mr Somanathan said.

"We release funds as per percentages... so as long as the previous instalment was spent, the money will be released. So I can clearly say the Finance Ministry does not discriminate. Some states may have grievances over percentages set by the Finance Commission but that I can't comment on."

"But we have not deviated from Finance Commission recommendations," Mr Somanathan said.

On a question about the face-off between Bengal's ruling Trinamool Congress and the centre - Chief Minister Mamata Banerjee last week held a protest event demanding the state's "dues" - the Finance Secretary told NDTV the Prime Minister's Office had stressed that Bengal get its share.

READ | On 48-hour Dharna Over Bengal's Dues, Mamata Banerjee's Big 2024 Hint

"... but the state has to meet prescribed guidelines, and there are audit issues to be addressed."

Mr Somanathan also spoke on various other topics, including the government's handling of the fiscal deficit, which has been revised to 5.8 per cent for the financial year 2024.

He also spoke about the government continuing to offer food subsidies, which, he stressed, remains a fiscally sustainable proposition, even if it will end up costing the exchequer more than Rs 2 lakh crore.

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