BHOPAL: Centre has slashed Madhya Pradesh’s share in taxes by Rs 11,556 crore. This has been done for the second time in a row. Union government had reduced Rs 2,677 crore in the last budget.
The devolution for Madhya Pradesh has been reduced. In 2019 it stood at Rs 61,074 crore which has been slashed to Rs 49,518 crores now (thus a reduction of Rs 11,556 crore).
Madhya Pradesh has thus suffered an overall loss of Rs 14,233 crore in past two budgets.
Fifteenth Finance Commission, under chairman NK Singh, has recommended that states receive 41 per cent share of the total central taxes for the year 2020-21.
The finance commission decides what percentage of the total share of central taxes will go the states.
The 14th Finance Commission in its report had recommended that a record 42 percent of the divisible pool of taxes should go to the states. However, 1 percent has been adjusted for the development of two newly formed union territories.
Uttar Pradesh has received the highest share among the states at 17.9 per cent of the total funds, followed by Bihar at 10.06 per cent, Madhya Pradesh at 7.8 per cent and Maharashtra at 6.1 per cent.
While UP’s share is virtually unchanged compared to the 14th Finance Commission, Bihar’s share has increased marginally by 0.4 percentage points. Madhya Pradesh’s share has increased by 0.3 percentage points and Maharashtra’s by 0.6 percentage points.