Centre, states must work in tandem: Jaitley

Tribune News Service

New Delhi, February 7

Finance Minister Arun Jaitley has expressed hope that additional allocation of resources to the states after implementation of the 14th Finance Commission recommendations would be optimally utilised for welfare schemes and building infrastructure.

“We expect that states whose resources have been increased after the implementation of the 14th Finance Commission will spend further on infrastructure creation and anti-poverty programmes since their income has increased considerably,” Jaitley said.

Speaking during the pre-Budget consultations with the Finance Ministers of states, Jaitley referred to the Prime Minister’s idea of “Team India” comprising the Centre and the states and reiterated the strong belief that “India grows when the states grow”.

Several states demanded continuation of certain social development-oriented Centrally Sponsored Schemes (CSS) such as Sarv Shiksha Abhiyan, Madhyamik Shiksha Abhiyan, ICDS, National Rural Health Mission on the old pattern as many states are unable to sustain them from their own resources.

States also demanded payment of CST arrears and incentives for promotion of dairy development along with agriculture in the country among others. “We request appropriate allocation in the Budget for clearing remaining CST compensation liability of all states for 2012-13 during the current financial year,” Punjab Finance Minister Parminder Singh Dhindsa said.

The government had decided to phase out CST over a period of four years with annual reduction at the rate of 1 per cent as a move towards implementation of the Goods and Services Tax.

Several states sought higher allocation in the upcoming Budget for implementing Pay Commission recommendations as well as under centrally sponsored schemes.

“The states have discussed their own resources and each one of them is competing for higher resources, higher investment and they are all geared up to fight this environment of global slowdown so that India remains an economy, which is on the move,” he said.

The 14th Finance Commission had last year recommended a record 10 per cent increase in the states’ share in the Union taxes to 42 per cent, which has been accepted by the Centre.