As against share of 6.16% of total tax devolution during 13th Finance Commission award, North Eastern States now get 7.94% of total tax devolution under 14th Finance Commission (FFC) award

Apart from estimated share in Central Taxes of Rs. 3,13,375 crore during 14^th Finance Commission (FFC) award period, FFC also recommends grant-in-aid of Rs.63,206 crore for North Eastern States.

Share of central taxes have increased by 251%, grant-in-aid by about 44% and in overall there is an increase of 183% in untied resources transferred to eight NE States under the recommendations of FC.

During 2015-16, Rs.32,657 crore (i.e.79%) as devolution of taxes, and Rs.11,433 crore (i.e.89%) as FFC grants have been released to the 8 North Esatern States.

For speedy development of North-eastern States, a Rs.740 crore is budgeted this year for schemes approved by North Eastern Council (NEC).

For Revenue deficit grants, Rs. 51,137 crore has been recommended to 6 North Eastern States assessed to be in deficit post devolution of central taxes, for local bodies Rs.8,866 crore and Central share to SDRF Rs.3,202 crore.

North Eastern and hill States have several unique features that have a bearing on their fiscal resources and expenditure needs and on federal fiscal relations. Taking into account the disabilities arising from constraints unique to each State like low level of economic activity and the consequential low revenue capacity in terms of low tax base, low per capita income; the disability arising from large forest cover and hilly terrain; remoteness and having international borders; infrastructure deficit etc. 14th Finance Commission (FFC) has arrived at expenditure requirements.

In fact, apart from estimated share in Central Taxes of Rs. 3,13,375 crore during FFC award period, it has recommended grant-in-aid of Rs.63,206 crore for NE States. For Revenue deficit grants, Rs. 51,137 crore has been recommended to 6 States assessed to be in deficit post devolution of central taxes, for local bodies Rs.8,866 crore and Central share to SDRF Rs.3,202 crore. As against share of 6.16% of total tax devolution during 13^th FC award, NE States now get 7.94% of total tax devolution under FFC award. There is greater predictability and certainty now in the quantum of funds flowing to the States apart from the overall increase in untied funds.

The transfer of Statutory Resources or untied fund flow to NE States in aggregate have gone up to Rs.54,385 crore in 2015-16, from Rs.30,072 crore in 2014-15, indicating an increase of 81%. The details are shown in the table below:

Sl. No.	State	2013-14			2014-15			2015-16 (BE)			Increase over 2014-15
		FC Tax Devolu-tion	FC Grant	Total	FC Tax Devolu-tion	FC Grant	Total	FC Tax Devolu-tion	FC Grant	Total
1	Arunachal Pradesh	1046	763	1809	1110	921	2031	7232	159	7391	5360	264%
2	Assam	11575	508	12082	12284	1130	13414	17401	3283	20684	7270	54%
3	Manipur	1439	1741	3180	1527	1827	3354	3238	2122	5360	2006	60%
4	Meghalaya	1302	883	2185	1382	783	2165	3371	643	4014	1849	85%
5	Mizoram	858	1083	1941	911	1055	1966	2414	2166	4580	2614	133%
6	Nagaland	1001	1994	2996	1063	2023	3085	2614	3224	5838	2753	89%
7	Sikkim	763	258	1021	809	515	1325	1925	49	1974	649	49%
8	Tripura	1630	1071	2702	1730	1002	2732	3369	1175	4544	1812	66%
	Total	19613	8302	27915	20815	9257	30072	41564	12821	54385	24313	81%

So far an amount of Rs.32,657 crore (i.e.79%) as devolution of taxes, and Rs.11,433 crore (i.e.89%) as FFC grants have been released to these 8 North Eastern States. The States will get 3 more installments of ‘tax devolution’ during the month of March 2016 and balance of grant-in-aid recommended by FFC.

As recommended by the Committee under the Chief Minister, Madhya Pradesh (MP), sharing pattern of CSS for North Eastern States and other Himalayan States has been retained at 90:10 for core schemes and 80:20 for other schemes even though FFC has not made any distinction between special and general category states. For the North Eastern States, an amount of Rs.18,640 crore (65%) has been released against Rs.28,546 crore allocation from various line Ministries Budget under CSS/CASP.

The special support provided to the North Eastern States for socio-economic, security related expenditure and infrastructural gap funding under NEC, NLCPR and funding provided to Sixth Schedule areas is unique. The North Eastern Council (NEC)gets direct funding from the Union Government. Rs.740 crore is provided for schemes of NEC during 2015-16.

Further, Government of India has provided Rs.1,000 crore as one time assistance for areas covered under Sixth Schedule in Assam, Meghalaya, Mizoram and Tripura.

                                                                                             

As such, continued special focus, particularly in terms of social and economic infrastructure with Inter-State significance is being given by the Union Government to this region.

Courtesy:pib.nic.in