The finance ministry has begun devolving funds to the country’s 29th state and written to the 14th Finance Commission to work out its requirements. The rules require the ministry to provide a state’s share from the central divisible pool of funds on the first working day of every month.
“Telangana state has come into existence today vide Andhra Pradesh Re-organisation Act, 2014. Hence, the share of erstwhile state of Andhra Pradesh has been apportioned between the successor states and devolved to them separately,” a ministry statement read.
The mandate of the panel has also been expanded to chart out a financial roadmap for the two states. “The Presidential Order to the 14th Finance Commission for taking into account the resources available to the successor states and making recommendations with respect to both… has also been sent for notification,” read the statement.
The 14th Finance Commission has been mandated to devise a formula for sharing of taxes and grants between the Centre and the states for a five-year period from April 1, 2015.