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States to raise common fiscal issues

Special Correspondent

T.M. Thomas Isaac says Finance Ministers will collectively meet the Finance Commission.

Thiruvananthapuram:Finance Ministers of States would soon come together on a single platform to present before the XIII Finance Commission common issues affecting the States in relation to their finances.

Announcing the outcome of the two-day national seminar on ‘Centre-State relations in the context of the XIII Finance Commission,’ organised by the State Planning Board and the Gulati Institute of Taxation Studies here, Finance Minister T.M. Thomas Isaac and Planning Board vice-chairman Prabat Patnaik said a suggestion on this had come up at the seminar and was endorsed by all State Finance Ministers who attended it. “The Finance Ministers would collectively meet the Finance Commission in addition to their own bilateral discussions with it,” Dr. Isaac said. West Bengal Finance Minister Asim Dasgupta, who is also chairman of the Empowered Committee of Finance Ministers, had given an assurance that the committee would take up the issue for discussions.

States’ share of taxes

Another major outcome of the seminar was the demand that the States’ share from the divisible pool of taxes should be raised to 50 per cent in view of the new responsibilities they had to perform in the context of new liberal policies. The new liberal policies had put a strain on the finances of the States, which had to cushion the impact of such policies. Successive Finance Commissions had kept the States’ share in the divisible pool virtually unchanged even while the basic imbalance between resources and responsibilities of the State government was growing.

The seminar, which was attended by the Finance Ministers of West Bengal, Jammu and Kashmir, Gujarat, Maharashtra, Tripura, Kerala, Andhra Pradesh and experts in the field, wanted the Finance Commission to have a re-look at Centrally-sponsored schemes, besides ensuring that 50 per cent of the additional resource requirement for meeting the expenditure obligations of the State on account of the Sixth Pay Commission recommendation was borne by the Centre. Dr. Isaac said the seminar had also demanded that the States be allowed to draw 50 per cent of the total market borrowings of the Centre and States taken together.

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