The Hindu Business Line : Finance Ministers want more funds for LSGIs

The seminar took exception to the practice of Finance Commissions imposing conditionalities upon State Governments even to make available to them the resources “that were their constitutional due.”

Our Bureau

Thiruvananthapuram, May 7

A two-day seminar of State Finance Ministers held here has felt that the Thirteenth Finance Commission should make adequate funds available to States in order to enable them to devolve larger resources to the local-self government institutions (LSGIs).

Briefing media persons here, the Kerala Finance Minister, Dr Thomas Isaac, and the Vice-Chairman of the State Planning Board, Dr Prabhat Patnaik, said the LSGIs needed larger resources to raise their expenditures relative to the GDP.

The assumption that the LSGIs did not need additional funds since they took over responsibilities and staff from the State Government is invalid. The State Planning Board and the Gulati Institute for Finance and Taxation organised the seminar.

The seminar reaffirmed the demand to wind up those Centrally-sponsored schemes falling within the States’ domain and hand over to them the resources spent on such schemes. The minimum social targets could be better achieved through the introduction of legislations that confer due rights on the people.

Concern was also expressed over the fact that successive Finance Commissions had kept the States’ share in the indivisible pool virtually unchanged. This share needed to be raised to 50 per cent to enable State Governments fulfil their increased responsibilities.

A suggestion was made that the Finance Ministers of States should collectively meet the 13th Finance Commission in addition to their own bilateral discussions with the Centre.

The seminar took strong exception to the practice of Finance Commissions imposing conditionalities upon State Governments even to make available to them the resources “that were their constitutional due.”

This amounted to violation of the Constitution and a dissenting note had been given in the report of the 11th Finance Commission.

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