Hyderabad: The Centre has decided to stop funding states that are not contributing their share to Centrally funded schemes. The states are only spending the funds given by the Centre.
The 14th Finance Commission had recommended increasing the states’ share in tax devolutions from 32 per cent to 42 per cent, increasing the flow of funds from the Centre to the states. Despite getting additional funds, the Centre says, some states are not contributing their share towards centrally sponsored schemes.
In an internal note, the Union finance ministry has reiterated that state governments must release their share of the funds for these schemes. It has warned that if, despite several notifications, any state government does not release its share, the Centre will stop the projects in that state.
The Centre sponsors 31 schemes in the states; there were 66 earlier but some of them have been merged and the others ended.
The Telangana state government received Rs 9,074 crore in 2016-17, and Rs 2,124 crore up to June this year.
The sharing pattern between the Centre and states in these schemes is in different ratios, ranging from 90:10 to 50:50 to 60:40.
The Centre had released more than Rs 20 crore under AMRUT but the TS government has not released its share. Recently the municipal administration department wrote to the state government requesting the release of the state’s share under the AMRUT scheme, but was refused due to a financial crunch.
A senior Central government official said states were sometimes diverting funds to other projects.
