Centre takes more from Telangana, returns less, confirms Union Minister

HYDERABAD: The newborn State of Telangana has been sharing its might in nation-building by significantly contributing to the Gross Domestic Product (GDP) of India, a sum total of the Gross State Domestic Product (GSDP) of all States of the Union. But the irony is, its share in the devolution of tax money has remained more or less the same.

With per capita GSDP of Rs 3,08,732 in 2022-23, Telangana stood number one in the country in contributing to the country’s GDP, followed by Karnataka with Rs 3,01,673 and Haryana with Rs 2,96,685.

Confirming what the State of Telangana had been arguing all these years, the Centre agreed that the State which topped in contribution to India’s GDP received less in the shape of devolution of taxes.

Answering a question in Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said that Telangana’s contribution to India’s GDP increased by 72 percent in the past six years. The per capita State domestic product at current prices of Telangana in 2022-23 was Rs 3,08,732, Rs 2,65,942 in 2021-22, Rs 2,25,687 in 2020-21, Rs 2,31,326 in 2019-20, Rs 2,09,848 in 2018-19, and Rs 1,79,358 in 2017-18.

Telangana’s share in devolution

The data released by the Centre showed that Telangana received devolution funds of Rs 18,560.88 crore in 2018-19, Rs 15,987.59 crore in 2019-20, Rs 12,691.62 crore in 2020-21, Rs 18,720.54 crore in 2021-22 and Rs 19,668.15 crore in 2022-23.

The State was arguing all these years that the Centre ignored its contribution to nation-building by pumping up all its energies and cheated Telangana when it came to the devolution of tax money.

When asked why Telangana, despite its significant contribution to national GDP was not compensated with a commensurate share of tax money from the central pool the finance ministry explained that the 15th Finance Commission’s formula took various factors in deciding the share in tax money. Union Minister for Finance Nirmala Sitharaman repeatedly snubbed the State’s request for better devolution arguing that the share of States was decided by the Finance Commission and not the Finance Ministry.

On the other hand, States such as Bihar and Uttar Pradesh that lag behind in development but score more marks on population contribute less to national GDP but get rewarded with a higher share in the central pool. Bihar which contributed Rs 49,470 (2021-22) per capita GSDP received Rs 95,509.85 crore from the central pool. Similarly, Uttar Pradesh with a per capita GSDP of Rs 70,792 (2021-22) received a devolution of Rs 1,69,745.30 crore.