The Hindu : National : Haryana seeks more funds from Finance Commission

Online edition of India's National Newspaper
Friday, Jul 18, 2008
ePaper | Mobile/PDA Version

National

National

Haryana seeks more funds from Finance Commission

Special Correspondent

Chief Minister Hooda points out reduction in Haryana’s share in Central taxes from 1.238 per cent to 1.075 per cent

Devolution from the divisible pool sought to be enhanced to 50 per cent from 30.5 per cent
Commission urged to safeguard the interests of manufacturing states like Haryana

CHANDIGARH: Haryana Chief Minister Bhupinder Singh Hooda on Thursday urged the 13th Finance Commission to consider the State’s requirement for upgradation grants worth Rs.9,671.33 crore for select services for the period 2010-15 and recommend liberal grant for proper maintenance of capital assets of the State estimated at Rs.5,385.92 crore.

Mr. Hooda made these demands during his meeting with the 13th Finance Commission led by its Chairman Vijay Kelkar here.

He said the State Government had assessed its maintenance requirements for irrigation works, roads, buildings and water supply schemes. He also drew the attention of Dr. Kelkar towards reduction in Haryana’s share in Central taxes from 1.238 per cent to 1.075 per cent, which was lower by more than 13 per cent, due to the recommendations of the 12th Finance Commission.

Pointing out that successive Finance Commissions had accorded greater weightage to the redistribution criteria of backwardness and poverty which had resulted in lower devolution to the better performing States like Haryana, Mr. Hooda proposed that the devolution from the divisible pool be enhanced to 50 per cent from 30.5 per cent.

He suggested as devolution criteria a weightage of 50 per cent to the population, 15 per cent to income distance, 10 per cent each to fiscal discipline and tax efforts and 5 per cent each to social indicators and contribution to central taxes. He also proposed that 50 per cent of the service tax devolved to the States from which they are collected.

Mr. Hooda also urged the Commission to safeguard the interests of manufacturing states like Haryana during the implementation of the Goods and Services Tax (GST). He proposed that NSSF loans availed up to date be consolidated at an interest rate of 7.5 per cent like other Government of India loans.

Haryana Finance Minister Birender Singh said that the State had achieved almost all the milestones under the Fiscal Responsibility and Budget Management Act well in advance of the target year 2008-09. He urged the Commission to consider Haryana’s memorandum sympathetically and recommend a mechanism of devolution of funds which gives incentives to the State’s performance and fulfil the aspirations and needs of the people of Haryana.

Dr. Kelkar complimented the Haryana Government for its growth and revenue performance and appreciated its exemplary implementation of the State Fiscal Responsibility and Budget Management (FRBM) Act.

He also congratulated the State for its successful introduction and implementation of VAT from April 1, 2003. Revenue from VAT had more than doubled since 2003-04 and had thus proved to be the main driver of the revenue growth in the State.

He said Haryana’s rate of growth of Gross State Domestic Product (GSDP) at current prices was 13.38 per cent from 1999-2000 to 2006-07 with a 7.89 per cent average annual real growth in per capita income during the same period. Also, the trend growth rate of Haryana’s own revenue receipts at 16.38 per cent was well above the national average of 11.64 p.c. for all States for 1999-2006, which pointed to good revenue efforts made by the State.

He highlighted issues emerging from the memorandum presented to the Commission including growth of public expenditure, need to focus on social sector expenditure including effectively managing the adverse sex ratio, improving productivity of public spending and enhancing the quality of outcomes. He drew the attention of the State Government to the need for effective public-private partnerships in sectors like health, education and infrastructure to bridge budget constraints and improve service delivery.

He encouraged the State Government to continue with its decentralisation initiatives consistent with the 73rd and 74th Constitutional amendments. He also welcomed views from all stakeholders on the appropriate design and structure of the proposed goods and service tax, nature and content of further fiscal reform and the issue of horizontal equity between States.

Printer friendly page
Send this article to Friends by E-Mail

National