Telangana Chief Minister K Chandrasekhar Rao has met the Governor and is understood to have expressed his displeasure on Centre reportedly reducing the states’ share of taxes and a likely negative impact of the decision to demonetise high-currency notes. Rao expressed his displeasure to Governor E S L Narasimhan during a meeting on Thursday, sources said.
The chief minister pointed out that the Centre has reduced states’ sharing taxes in the middle of financial year, an “unprecedented move in the history of India”, they said.
Any changes in share of taxes is usually done in March, he noted.
Consequent to the reduction in the share of taxes, Telangana, which usually should get Rs 997 crore per month, received only Rs 585 crore this month. “This is a fall of Rs 412 crore (42 per cent),” Rao told Governor.
Such a reduction would cause inconvenience to the states and result in problems in implementation of various programmes, he said.
The demonetisation of Rs 500 and Rs 1,000 currency notes is likely to cause about Rs 2,000 crore loss to Telangana per month, Rao told the Governor, as per sources.
The Centre’s decision would adversely affect the real estate sector in Telangana and also transactions in motor vehicles, he said.