Andhra Pradesh government today urged the 13th Finance Commission to ensure that the state got a share in the royalty or in the profit from the sale of gas from the Krishna-Godavari basin.
Presenting the case before the 13th Finance Commission, led by its chairman Vijay L Kelkar, chief minister YS Rajasekhara Reddy said that it was unfortunate that the state does not get any share in the royalty or in the profit despite having the first land fall point of the KG basin is East Godavari.
It also did not enjoy any priority in allocation or in pricing. The extreme interpretation of the constitutional provisions about the offshore resources should not be invoked to deny the state its due share.
"The gas distribution network will be affected and gas will not reach the households as envisaged in the absence of clear allocation,” the CM told the visiting team.
Pointing out that there has been an increase in the number of Central cesses and levy of surcharges, the chief minister requested the Finance Commission to arrest the declining trend of transfers. It should also consider compensating states in case of delays in the fixation of royalties on major minerals and also realign resources in favour of states for inclusive growth. Besides, he wanted the states' share of central taxes to be raised to 50 per cent from the present 30.5 per cent.
Kelkar, in his reply to the state government's presentation, rapped the state over worsening of the state’s fiscal management. He raised concerns over cost overruns on irrigation projects, losses of public sector undertakings and increasing subsidy bills.
The cost overruns on irrigation projects was Rs 6,127 crore, losses made by PSUs touched Rs 2,770 crore, he pointed out adding that the fiscal burden on the state on account of subsidised rice was Rs 1,900 crore in 2008-09 and on subsidised power Rs 2,385 crore.
Many multi-purpose projects with a significant irrigation component in them were taken up as far back as 1960s and 1970s but still remained incomplete, Kelkar said.
He wanted the state government to establish a water regulatory authority on the lines of the state Electricity Regulatory Commission for better accountability. "The trend growth rate (TGR) of revenue expenditure for 2010-15 is 14.7 as against 12.4 per cent for the period 1999-2008. The increasing difference in TGR for non-plan revenue is indicative of a worsening scenario", he said.
"Inflation is under control and balance of payments position continues to be sound. The government has shown its willingness to enact significant monetary, fiscal and sectorial policy measures to minimise the negative impact on the real economy,” Kelkar added.
