Chief Minister N. Chandrababu Naidu with 16th Finance Commission Chairman Arvind Panagariya during the latter’s visit to the Secretariat at Velagapudi on Wednesday.
| Photo Credit: Special Arrangement
Andhra Pradesh Chief Minister N. Chandrababu Naidu has stressed the need to increase the vertical devolution share to the States.
A delegation of the 16th Finance Commission, headed by its Chairman Arvind Panagariya, visited the Andhra Pradesh Secretariat on Friday.
In a meeting with the delegation, Mr. Naidu said that the States must play a key role in achieving the goal of a developed India. To support this, the Finance Commission should increase the current vertical devolution share from 41% to 50%.
Meanwhile, the share of southern States in horizontal devolution is also declining, Mr. Naidu noted.
During the 10th Finance Commission, the share of southern States in horizontal devolution was 24.30% and it was to 15.80% by the 15th Finance Commission.
“In the case of Andhra Pradesh, its share in horizontal devolution is lower than its share in national GDP and population, which is economically not advantageous for the State,” Mr. Naidu said.
Grants to rural local bodies
The share of Andhra Pradesh in horizontal devolution is below its share in national GDP and population, causing fiscal disadvantage. While allocating grants to rural local bodies in States, it is proposed that 70% weightage be given to population, 20% to agriculture, and 10% to geographical area, the Chief Minister suggested.
Mr. Naidu said while ₹69,897 crore was needed for gram panchayats, mandal parishads, and zilla parishads, only ₹7,381 crore was currently available.
An additional ₹62,516 crore in funds is required. Urban local bodies need ₹19,871 crore in grants for drinking water supply, sanitation, road construction, urban transport, street lighting, and sewage systems. Additionally, for the period between 2026 and 2031, ₹16,181 crore is needed to deal with natural disasters,” he added.
Published – April 16, 2025 08:17 pm IST