Revenue Facts – Andhra Pradesh and Telangana


Item

  Andhra Pradesh

Telangana

Population

58.32%

41.68%

Share of Central Taxes

(AP 4.305%, TS 2.437%)

63.85%

36.15%

Difference in %

+5.53%

-5.53%

Actual in 2015-16 in Rs Crores

 21,894

 12,596

Own Tax Revenue in Rs Crores

44,423

43,534

 Total Tax Revenues in Rs Crores

 66,317

 56,130

Effective Revenue Ratio

54.16%

45.84%

Most people in India would be thinking with Hyderabad going to Telangana, Andhra Pradesh must be suffering a lot with lack of revenues to sustain its Growth. Center is betraying Andhra Pradesh by denying Special Category Status Promised by Then Prime Minister in the Parliament and the Act provision to address the revenue deficits.

Two years have passed, including one full financial year with both Governments placing the Revenue Numbers as part of Budgets.

Myth

Andhra Pradesh CM is on record almost on daily basis stating the State with 58% Population is having only 47% Revenues hence Center must support AP with more funds.

Fact

Last Financial year is the First Financial Year based on 14th Finance Commission that has devised very good devolution formula to increase the devolution to states with more income distance to the highest per capita income state and reduce the devolution of central taxes that are close to highest income state also it has given higher weightage to the area of the state than population as a result.  With 58% population AP gets 63.85% of the central taxes share of devolution and only 36.15% goes to Telangana.

This has in fact removed the need of special category status itself and devised a very rational method to do balancing act by the center between the states based on the per capita income levels.

Myth

State’s Own Tax Revenues are much lower than Telangana.

Fact

Many pointed out what AP was showing as revenue from Hyderabad under Telangana in its claims to show AP revenues as low, included the revenue of operations of many entities with head quarters or registered offices in Hyderabad  covering Andhra Pradesh Region as well, which upon bifurcation would not be coming to Telangana. This is now established with AP revenues in first financial year been marginally ahead of Telangana not less as has been argued relentlessly for more than 3 years now.

Neither Government can claim they made big contribution in the very first year of revenues.

Official Tax revenue numbers from both states reveal, there is no significant revenue imbalance when States Own Tax Revenues and Devolution of Central Tax Revenues are considered as AP accrued about 54.16% and Telangana 45.84%

With the Revenue Deficit Financing by Center to AP practically there is no imbalance.

Its time for Both Governments to Start delivering on Good Governance, particularly Andhra Pradesh Government to STOP wasting its own time and everyone else time with Goebbels Victim Campaign.

Some readers may not be aware, Income Tax, Excise Duties, Corporate Tax, Wealth Tax, Capital Gains Tax, Gift Tax collections in Hyderabad goes to Center’s Kitty not Telangana kitty , as part of devolution formula more of it returns to AP than to Telangana !

 

“You can fool all the people some of the time,

and some of the people all the time,

but you cannot fool all the people all the time

– Abraham Lincoln

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s