UP's share in central tax kitty up 40% to Rs 94,000 crore

The states have now been mandated to fund various development and welfare schemes out of its own kitty

Uttar Pradesh's share in the divisible pool of central taxes is estimated at over Rs 94,313 crore during 2015-16.

This would be 42% over actual receipts of Rs 66,623 crore of its taxes share during 2014-15. In the last fiscal, UP was earlier projected to get Rs 75,417 crore in central taxes, however, its actual pie got reduced in the revised estimates of Union Budget.

Interestingly, while UP stands to gain in absolute terms, its share in tax revenue has in fact decreased to 17.959% from 19.677% (18.21% from 19.987% in service taxes) as per the recommendations of 14th Finance Commission, which have been implemented from this fiscal.

Now, the states' share in central taxes has increased from 32% to 42%, which means larger devolution.

However, the states have been mandated to fund various development and welfare schemes out of its own kitty rather than the erstwhile model wherein the Centre footed the major portion of such expenditure.

On this account, the UP government has claimed that, as per current estimates, it would have to incur an additional fund of Rs 18,257 crore towards such schemes.

UP chief minister Akhilesh Yadav has even claimed that the budget for centrally funded schemes had shrunk by 44% and this shortfall is additional burden on the states.

The Centre has proposed to include only 7 schemes for central funding. However, Yadav had recommended in his earlier letter that more development and socioeconomic schemes be included spanning urban development, energy, poverty alleviation, rural development, human resource development, agriculture etc.

Recently, the state government had presented supplementary budget of almost Rs 20,000 crore in the ongoing monsoon session of the state legislature. The budget has been passed.

The funds required would be in addition to over Rs 3,00,000 crore of UP Annual Budget presented in February 2015. The additional money would be pumped in the flagship projects of the government and other development schemes.

Yadav, who has been writing letters to Prime Minister Narendra Modi on regular intervals over various issues, has been urging the Centre to provide liberal funds to UP given the large size of the state's geography and population.