The Hindu Business Line : Call to hike States’ share of Central taxes, market borrowings to 50%

Addressing a seminar on Centre-State relations here on Tuesday, Mr Dasgupta, who is also the Chairman of the empowered committee of the State Finance Ministers, said that the State’s share in the total market borrowings of the Centre and the States should also be raised to 50 per cent.

The Chief Minister of Kerala, Mr V.S. Achuthanandan, inaugurated the seminar.

Explaining the major points that are to be considered for redefining the Centre-State relations, he said that the Centre should seek the concurrence of the States before discussing any issues with the World Trade Organisation, International Monetary Fund, World Bank or any agency on State subjects.

In other words, the Centre should not impose any external loan or aid-agency conditionality on any State Government without its concurrence.

At least 50 per cent of the additional financial burden of the States as a consequence of the Centre’s decision on Sixth Pay Commission may be shared by the Centre. The issue should be adequately taken care of while assessing the expenditure needs of the States by the 13th Finance Commission. Mr Dasgupta said that all Centrally-sponsored schemes in the State subjects should be transferred to the States with funds. Further, the debt problems of the States, particularly those related to small savings loan, should be solved on a State-specific basis without delay.

In order to contain inflationary pressures, the public distribution system should be strengthened and expanded in coordination with the States. Besides, the legal and administrative measures for price control should be strengthened.

The royalty on coal and other minerals should be revised more frequently and the coal royalty paid on ad valorem basis and at the latest rates without any discrimination among the States.

Mr Dasgupta also called for giving adequate representation to the States in National Development Council, Planning Commission, Inter-State Council, Finance Commission and on the boards of the Reserve Bank of India and other financial institutions. Also, it should be ensured that the functioning of these agencies and institutions are democratic and fair to the States.

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