The Centre is likely to allocate an additional Rs 3,000 crore to the states by way of the new devolution formula it proposes to adopt in the forthcomming budget.
The budget might also contain provisions for providing long-term loans to states for handling the financial burden arising out of the implementation of the Fifth Pay Commission.
The budget is expected to implement the 10th Finance Commission's recommendation of allocating 29 per cent of central resources to the states. This will increase the amount of central funds allocated to the states by Rs 3,000 crores.
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The Shekhawat panel, which is going into the report of the finance commission, wants the Centre to allocate more than 29 per cent of its resources to the states. It is currently engaged in consultations with state governments and the finance ministry to determine the level of allocation.
The budget is expected to incorporate the recommendations in the first report of the special task force headed by Rajasthan chief minister Bhairon Singh Shekhawat.
The panel, which met in New Delhi yesterday, decided to meet again on Monday to finalise its first report.
"We want to come out with the first report before the budget so that the recommendations are utilised in the budgetary excersise", a source said.
The panel is also expected to suggest ways to improve the resource mobalisation capabilities of state governments. On the contrary, state governments will be asked to shoulder more responsibilities in implementing social welfare schemes.
One of the measures being contemplated by the special task force is to reduce the quantum of central loans to states and increase the level of subsidies. The panel wants the ratio between central loans and subsidies which is 70:30 per cent, to be changed to 50:50 per cent.
Sources close to the panel, however, denied that the task force is going beyond the perview of the 10th finance commission recommendations and setting the agenda for the 11th Finance Commission which is due to be appointed.