Telangana calls for fairer tax devolution adjustment

In a recent Budget speech, Telangana's Deputy Chief Minister Mallu Bhatti Vikramarka raised concerns about the state's declining share of tax funds. He noted that under the 14th Finance Commission, Telangana received 2.437% of total funds, but this dropped to 2.102% under the 15th Finance Commission. The Deputy Chief Minister emphasized that the current system, which allocates fewer funds to states that perform well, is unfair. He called for a more rational distribution of tax revenues. Telangana's government advocates for a horizontal tax devolution approach, which would change the way funds are allocated. Instead of focusing mainly on "Per Capita Income Distance," Telangana proposes that 50% of the allocation should consider the Gross State Domestic Product (GSDP). This change aims to ensure fairer distribution of resources to states contributing significantly to the nation's economy. Vikramarka also highlighted the importance of increasing central tax devolution from 41% to 50% for the upcoming 16th Finance Commission. He stated that the state is committed to securing its fair share while promoting effective use of resources to boost financial stability and growth.