The Telangana Government has made a strong pitch for reimbursement of expenses incurred by it on constitutional bodies and common institutions which served both the States (Telangana and Andhra Pradesh) until separate entities were created.
Deputy Chief Minister Mallu Bhatti Vikramarka sought the Central Government’s intervention in settling the dues owed by neighbouring Andhra Pradesh to it during his meeting with Union Finance Minister Nirmala Sitharaman on Saturday (August 24, 2024). The Deputy Chief Minister informed the Union Minister that Telangana incurred ₹703.43 crore expenses on constitutional bodies and common institutions like Raj Bhavan, High Court, Lok Ayukta and Human Rights Commission. Andhra Pradesh owed ₹408.49 crore which had not been reimbursed despite multiple communications and agreements.
Significance of the reimbursement
Reimbursement of the dues was essential to ensure that Telangana’s finances were not unduly burdened by costs that were shared responsibilities. “Emphasising cooperative federalism and fair distribution of expenses will highlight the importance of collaborative governance and adherence to the commitments made during bifurcation reinforcing the Centre’s role as an arbiter,” he said.
Also, the reimbursement was critical for upholding the financial agreements and ensuring Telangana’s economic stability. Resolution of the issue was crucial to maintaining good inter-State relations and ensure compliance with legal and financial norms established under the Reorganisation Act. “Prompt resolution will also avoid further legal entanglements and foster a cooperative approach,” he said.
Mr. Vikramarka urged the Finance Minister to intervene and facilitate expeditious reimbursement of these funds by the neighbouring States including interest.
The Deputy Chief Minister, in a separate representation to the Union Finance Minister, sought reimbursement of ₹208.24 crore under Section 56 (2) of the AP Reorganisation Act, 2014. He explained that Andhra Pradesh owed ₹208.24 crore for the net credit carried forward by the Commercial Taxes department at the time of bifurcation. Despite agreements reached between the two States and multiple requests, the liability remained unsettled a decade after bifurcation.
Accordingly, Ms. Nirmala Sitharaman was asked to instruct Andhra Pradesh Government to expedite reimbursement of ₹208.24 crore including applicable interest.
