HYDERABAD: Telangana Municipal Administration and Urban Development Minister K T Rama Rao opposed the N K Singh-headed 15th Finance Commission's recommendation to decrease devolution and called them as "demotivating, penalising and disincentivising " for well-performing southern states like Telangana, on Friday February 14.

He also reminded the Centre over the GST compensation and legal commitments.The reduction in devolution to 41 per cent from 42 per cent earlier will lead to Rs 4,000 crore hit to Telangana, said Rao. He questions centre over the need to penalise a performing state and bring down our devolution from 42 per cent to 41 per cent.

While speaking about the GST compensation payment, he said the 14 per cent revenue compensation is embodied in the Act and is a commitment made by the Union while passing the law.

Minister even said that Telangana government didn't go to a court of law, but demanded the GST compensation be paid. So we expect that the government of India will pay in the second tranche because the first tranche has been paid.

Telangana government demanded and protested in Parliament. Hopefully they will pay, he said. KTR also pitched for a leeway in fiscal responsibility targets for well performing states. Telangana government be given more leeway as now it (fiscal deficit) is about 3.5 per cent, it should be 5 per cent, he added

He also alleged that the Union Finance Ministry's Department of Economic Affairs does not allow the states to borrow directly from foreign investors, and underlined that the Union government should be playing the role of “enabler” for states.

He also claimed that the Centre did not support Telangana's scheme for having two parks dedicated for the pharmaceutical and the textile sectors.

The minister said state government need to focus on infrastructure, innovation and inclusive growth to achieve economic growth, and urged the Centre to emulate efforts undertaken Telangana in these areas.

Rao rued that the “congruence” between states and the Centre is missing and warned that goals like USD 5 trillion economy will be difficult to achieve sans that.

He also sought for regulatory changes to ensure that Indian pension money needs to be invested to create infrastructure, just like how overseas money from Canadian pensioners gets invested here.

He also questioned the need to have sectors like education, healthcare and agriculture in the concurrent list, demanding that states should be given the leeway to decide for themselves on such aspects where local factors play an important role.

He concluded saying that Telangana government wants to create two varsities dedicated for pharmaceuticals and aerospace in the state.

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