The cut in off-budget borrowings such as those by the Kerala Infrastructure Investment Fund Board (KIIFB) will adversely affect State projects, Minister for Finance K.N. Balagopal said in the Assembly on Wednesday.
The Finance Minister said the Union government was infringing on the State’s rights. As per the report of the 15th Finance Commission, States were earmarked 34% of the total national revenue, while their expenditure was 64%. On the other hand, the Union government revenue was 64%, when its expenditure was just one-third of it. This was pushing the States into grave financial crisis.
The Union government had cut the State’s share in the divisible pool from 3.9% to 1.92%. This was 18% for Uttar Pradesh, he pointed out.
