Union Finance Minister Nirmala Sitharaman on Sunday denied that the Central government was discriminating against Telangana, saying it is not belittling contribution of any state to the central pool of taxes.

She also did not agree that the Centre imposed any cut on devolution of funds to Telangana or is not cooperating with the state.

The minister was responding to Telangana Chief Minister K. Chandrashekhar Rao's statement, expressing unhappiness over the funds allocation made for the state in the Union Budget 2020-21.

Addressing a news conference after interacting with representatives of trade and industry here, Sitharaman said the Centre was moving ahead with the spirit of cooperative federalism. She clarified that the devolution of funds is decided by the Finance Commission and not by the Finance Ministry.

As the number of states came down by one and the number of Union Territories increased by two, there was some change in devolution of funds to the states, she said.

She also said 15th Finance Commission was looking into the suggestion that performing states should be given incentives. She said the Commission had given its report only for one year and while submitting its full report in April, it may make necessary recommendations.

Without naming Telangana Industry Minister K. T. Rama Rao, Sitharaman said a minister had taken exception to her using the term "given" while replying to a question in the Parliament about devolution of central funds to Telangana.

"He is saying Telangana is contributing and what the Centre is saying 'given' is our right. It's correct. Every state is contributing. Telangana is also making good contribution," she said.

"Given is common expression used in Parliament. If he has any objection he should write to Lok Sabha Speaker to give a ruling that this word should not be used," she added.

Officials pointed out that Telangana recorded one of the biggest increases in total Central transfers in last five years. The increase in transfers from Central taxes and grants was 128 per cent during the period of 14th Finance Commission. They said the devolution increased from Rs 46,747 crore in earlier Finance Commission period to to 1,06,666 crore in the 14th Finance Commission period.

They said Telangana was also given 0.5 per cent of higher borrowing limit compared to other states.