3-Feb-2020: Centre rejects advice on special grants for States

The 15th Finance Commission had recommended special grants worth ₹6,764 crores to States in 2020-21, to ensure that these states do not receive an amount less than the previous year’s allocation. The Centre has rejected this recommendation on the lines that it seeks to introduce a new principle in allocation as against the already set criteria for allocation.

Recommendations accepted by the Centre include:

• Granting the states 41% share of the divisible pool of tax collections.
• The suggested grants-in-aid and post-devolution revenue deficit grants for 14 States.
• The grants to local bodies.
• Other grants like disaster-related grants and sectoral grants.