In a press conference held on Tuesday, Telangana’s Agriculture Minister Tummala Nageshwara Rao accused the Central government of financial discrimination against the southern state. The minister claimed that the Union government’s economic policies are politically motivated and violate the principles of fiscal federalism.
Rao cited official data to highlight his concerns, stating that between 2018-19 and 2022-23, the Centre collected Rs.90.80 lakh crore in taxes across the country, with more than one-fourth coming from southern states like Telangana. However, he pointed out that only 16.3 percent of these funds were returned to the southern states, a disparity he described as “against the spirit of fiscal federalism.”
The minister alleged that while southern states receive an average of only 30 paise for every rupee contributed in taxes, northern states such as Bihar and Uttar Pradesh receive nearly Rs 4 per rupee. This imbalance, he warned, could widen economic disparities and deepen the north-south divide.
In a detailed breakdown of Telangana’s financial situation, Rao revealed that in 2024-25, the Centre collected Rs.1,33,208 crore in taxes from Telangana. In return, the state received Rs 27,050 crore as share in central taxes, Rs.7,913 crore as Central grants, and Rs.16,762 crore under centrally sponsored schemes – totalling Rs.51,725 crore. However, the minister clarified that this figure includes scheme-related funds, with the amount available for independent use being significantly less.
Rao also criticized the 16th Finance Commission for excluding revenue deficit grants. He further claimed that Telangana is losing around Rs.8,000 crore annually due to GST amendments. The minister’s statements come amidst ongoing debates about fiscal federalism and inter-state financial relations in the Parliament.
