Madhya Pradesh to suffer loss of Rs 4000 crore with Centre’s new finance formula | bhopal | Hindustan Times
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Madhya Pradesh to suffer loss of Rs 4000 crore with Centre’s new finance formula

bhopal Updated: Jul 02, 2015 19:10 IST
Shahroz Afridi
Shahroz Afridi
Hindustan Times
Centre and state fund-sharing pattern

With the introduction of a new finance sharing formula by the Modi government, the Madhya Pradesh government may suffer a loss of about Rs 4000 crore to meet expenses for its various schemes.

The Centre has refused to provide any funds for the JNNURM (Jawaharlal Nehru National Urban Renewal Mission) to the state government, besides reducing its share in other schemes.

It has cut an estimated Rs 14,000 crores in different schemes. The state stands to gain about Rs 10,000 crore by way of devolution from its taxes share from the Centre, leaving a gap of about `4000 crore, said a senior official from the finance ministry.

The NDA government at the Centre has changed the fund-sharing pattern with the states. Most of the schemes have been changed to 50-50 sharing. The National Food Security Mission that was funded completely by the Centre has now transferred 50% of the load to the states converting it into a 50-50 sharing scheme.

The Centre has also cut its expenses by 50% from schemes like Rashtriya Krishi Vikas Yojna, National Plan for Dairy Development, Integrated Development of Wild life Habitat, Rajiv Awas Yojna, Pradhan Mantri Sadak Yojna and Support for Statistical Strengthening schemes which were completely funded by the Centre. This suggests the budgetary allocation plan of the finance department, said the official.

The funding pattern of several other schemes has also been changed to 50-50. Earlier, the Centre’s share was more like the National Horticulture Mission with the Centre’s share was 85% and the state’s was 15%. Similarly, Nirmal Bharat Abhiyan, National Mission on Agriculture Extension and Technology, National Livestock Health and Disease Control Programme and about a dozen other schemes too, have been changed to 50-50 sharing pattern.

“While some schemes have been completely stopped, some have been merged with other similar schemes,” said finance minister Jayant Malaiya.

Sources in the finance ministry say that going by the 14 finance commission recommendations, the state government would get about Rs 9-12000 crore from the Centre. It may actually come to about Rs 10,000 crore.

“The state government would also benefit by way of devolution from the Centre, which has raised the state’s share by 10%. The state used to get 32% till now which has been increased to 42%,” said Malaiya.