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Jaitley clarifies changes in funding pattern for NE

By Spl Correspondent

NEW DELHI, Nov 25 - Clarifying the Centre�s stand on change in funding pattern, Union Finance Minister Arun Jaitley said for all �core of the core� schemes, the funding pattern for the eight northeastern states would continue to be in the ratio of 90:10.

Ever since endorsement of the recommendations of the Fourteenth Finance Commission (FFC), there was confusion over the fate of the funding pattern ratio and the fate of the northeastern states as �Special Category States�.

In reply to a Lok Sabha question, Jaitley said that the existing funding pattern will continue for core of the core schemes. For core schemes, the funding pattern for the eight northeastern states and Uttarakhand, Himachal Pradesh and Jammu and Kashmir shall be Centre 90 per cent and state 10 per cent, whereas for the rest of the states, this ratio shall be Centre 60 per cent and state 40 per cent.

For optional schemes, the funding pattern for the eight northeastern states and Himalayan states of Uttarakhand, Himachal Pradesh and Jammu and Kashmir shall be Centre 80 per cent and state 20 per cent, whereas for the rest of the states it will be Centre 50 per cent and state 50 per cent.

Ordinarily, no centrally sponsored schemes (CSS) will be sanctioned where the Central share is less than 50 per cent. �However, all the sharing patterns indicated above shall be subject to the proviso that if the Central share is already below that indicated in the sharing pattern, then the Centre�s share would remain capped at their present level,� Jaitley said.

The Union Finance Minister said the government received representations from states regarding the changed pattern in the CSS. The government set up a sub-group in the NITI Aayog under the convenership of Madhya Pradesh Chief Minister Shivraj Singh Chauhan comprising 12 members, including 10 chief ministers of various states, to examine the current CSS framework and recommend the sharing pattern and measures for streamlining, flexibility, reforms in the CCS and coordination between the Centre and states for achieving the objective of the schemes.

The government has accepted the recommendations of the sub-group and NITI Aayog on August 17, and has issued modalities regarding rationalisation of the CSS, including their funding pattern, informed Jaitley.

The FFC after considering all factors, recommended enhancement in the share of the states in the divisible pool of Central taxes and duties from 32 per cent to 42 per cent with effect from 2015-16, which was accepted by the Union Government.

In reply to a separate question, the minister said that according to the formula adopted under the 13th Finance Commission, the pattern of financial assistance to northeastern states for the CSS was Centre 90 per cent and state 10 per cent. Following the recommendations of the FFC, devolution to the states was increased from 32 per cent to 42 per cent.

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Jaitley clarifies changes in funding pattern for NE

NEW DELHI, Nov 25 - Clarifying the Centre�s stand on change in funding pattern, Union Finance Minister Arun Jaitley said for all �core of the core� schemes, the funding pattern for the eight northeastern states would continue to be in the ratio of 90:10.

Ever since endorsement of the recommendations of the Fourteenth Finance Commission (FFC), there was confusion over the fate of the funding pattern ratio and the fate of the northeastern states as �Special Category States�.

In reply to a Lok Sabha question, Jaitley said that the existing funding pattern will continue for core of the core schemes. For core schemes, the funding pattern for the eight northeastern states and Uttarakhand, Himachal Pradesh and Jammu and Kashmir shall be Centre 90 per cent and state 10 per cent, whereas for the rest of the states, this ratio shall be Centre 60 per cent and state 40 per cent.

For optional schemes, the funding pattern for the eight northeastern states and Himalayan states of Uttarakhand, Himachal Pradesh and Jammu and Kashmir shall be Centre 80 per cent and state 20 per cent, whereas for the rest of the states it will be Centre 50 per cent and state 50 per cent.

Ordinarily, no centrally sponsored schemes (CSS) will be sanctioned where the Central share is less than 50 per cent. �However, all the sharing patterns indicated above shall be subject to the proviso that if the Central share is already below that indicated in the sharing pattern, then the Centre�s share would remain capped at their present level,� Jaitley said.

The Union Finance Minister said the government received representations from states regarding the changed pattern in the CSS. The government set up a sub-group in the NITI Aayog under the convenership of Madhya Pradesh Chief Minister Shivraj Singh Chauhan comprising 12 members, including 10 chief ministers of various states, to examine the current CSS framework and recommend the sharing pattern and measures for streamlining, flexibility, reforms in the CCS and coordination between the Centre and states for achieving the objective of the schemes.

The government has accepted the recommendations of the sub-group and NITI Aayog on August 17, and has issued modalities regarding rationalisation of the CSS, including their funding pattern, informed Jaitley.

The FFC after considering all factors, recommended enhancement in the share of the states in the divisible pool of Central taxes and duties from 32 per cent to 42 per cent with effect from 2015-16, which was accepted by the Union Government.

In reply to a separate question, the minister said that according to the formula adopted under the 13th Finance Commission, the pattern of financial assistance to northeastern states for the CSS was Centre 90 per cent and state 10 per cent. Following the recommendations of the FFC, devolution to the states was increased from 32 per cent to 42 per cent.