By Punjabnewswire4u
CHANDIGARH, SEPT 7
To enable the state to overcome financial challenges and
ensure a stable growth, the Punjab Chief Minister Mr. Parkash Singh Badal today
urged the 14th Finance Commission to recommend State Specific Grants
of Rs 9639 crore besides fully funding the Agricultural Diversification Plan
worth Rs. 8775 crores and a Debt Relief Grant to the tune of Rs 24, 813 crore
for the state.
Making a forceful presentation, after submission of
memorandum, before the 14th Finance Commission led by its Chairman
Mr. YV Reddy here at Punjab Bhawan this morning, the Chief Minister apprised
the Commission that the Centre had referred the issue of debt stressed states
of Kerala, Punjab and West Bengal to the 14th Finance Commission and
thus demanded Rs 24, 813 crore as Debt Relief Grant towards outstanding Small
Savings and Government of India (GoI) loans. He mentioned that the then Prime
Minister Mr. IK Gujral had waived the entire special term loan raised during
the militancy in Punjab. However Mr. Badal lamented that when it came to
implementation, only the outstanding balance on that date was waived therefore
he impressed upon the Commission to grant a ‘Special Term’ loan and interest
already paid by the state amounting to Rs 2694 crore at current prices.
The Chief Minister gave a brief account of how the state
had been meted out a step motherly treatment by the Centre despite being the
‘Sword Arm’ and ‘Granary’ of the nation. Likewise, the state also faced the
brunt of partition besides our people paid huge price during Indo-Pak wars.
Subsequently we faced long years of Militancy and Punjab remained under long
spells of President rule thus no additional sources were raised and substantial
resources were diverted towards fighting the militancy pushing the revenue
surplus state into vicious debt trap. Mr. Badal reiterated that Punjab fought
the nations’ war and thus sought the restructuring of the balance outstanding
debt and a moratorium on the payment of interest, considering the strong
financial position of the state prior to militancy.
Pleading to recast the Federal Structure in true sense
which was gradually shedding its character to pave way for a unitary form of
Government, the Chief Minister urged the Commission to make comprehensive
recommendations for decentralization of planning process besides evolving fair
and justifiable formula for sharing of resources. He said that the States
should be allowed to decide their own plan priorities as per their local needs
adding that funds should be given in an “untied” manner. Thus Mr. Badal
underlined the need to recommend all grants including Plan grants be
distributed only on the basis of Finance Commission recommendations.
The Chief Minister bemoaned that by and large the states'
expenditure in development has been rising while their share in revenue was
readily declining whereas the scenario in Center situation was absolutely
opposite as it was accumulating far more revenue than actually incurring
expenditure on development. Therefore he requested the Commission to fix the
share of states in central taxes at 50% and also to bring cess, surcharge and
royalties to the shareable pool. To substantiate his claim, Mr. Badal cited
that since the Fifth Finance Commission, state’s share in central taxes has
been reduced from 2.450% to just 1.389% now.
Ridiculing Centre’s discriminatory approach for
devolution of funds amongst the states, the Chief Minister said that over the
years such formulas had been against the Fiscal interests of the progressive
and better performing states like Punjab. Due weightage should be given to the
Gross State Domestic Product (GSDP) and to the proportion of SC/ST population,
which was the highest amongst the states in the country.
Referring to the Industrial Tax concessions given to
neighboring states by Central Government, the Chief Minister said that this
discriminatory policy has dealt a severe blow to state’s economy resulting in
stoppage of fresh investment and flight of capital from the state. He asked the
GoI to grant tax concessions to Punjab, at par with those granted to the
neighbouring States, to compensate the state for the losses suffered by the
flight of industry. Mr. Badal also sought Rs 3000 crore for promoting industry
in Punjab by creating new and upgrading the existing infrastructure in the form
of Industrial Focal points, Integrated Textile Parks, Food Parks, SEZs etc. In
addition to this, we need Rs. 500 crore to build and strengthen infrastructure
in the border areas to make use of the increased trade with Pakistan.
Outlining the state’s Agricultural Diversification Plan
of Rs. 8775 crores, the Chief Minister said that it was all the more important
now with the Centre Government mulling to do away with the MSP regime.
Therefore he said that the state was left with no other alternative but to go for
diversification of Agriculture through promoting its allied sector like dairy
farming, piggery, fisheries, bee-keeping etc besides motivating the farmers to
cultivate less water intensive and highly remunerative crops. Mr. Badal
informed the Commission that to bail out the farmers in this hour of crisis and
to save agriculture, the State government was investing nearly Rs. 6000 crore
per year for providing electricity to the agriculture sector. Terming this
initiative as a step towards the National Food Security he urged that GoI
should share atleast 50% of the investment.
The Chief Minister attributed the population as a correct
reflection of contribution of taxes, therefore he requested to accord weightage
of at least 35% to population. To further give due importance to the component
of SC/ST population, he suggested the Commission for introducing the element of
equity, an additional weightage of 15% should be given to the states as they
undertake substantial expenditure for the upliftment and welfare of these
sections of society. Likewise Mr. Badal also said that the
weightage of the areas must be increased from existing 10% to 15% in the
devolution criteria to meet the higher administrative costs to deliver similar
level of public service across the country.
The Chief Minister also said that in order to enable the
urban and Rural local bodies to perform their functions efficiently the general
basic grant and performance grants should be merged into a single general grant
for local bodies, which must be equal to three percent of divisible pool of
central taxes. He also said that this grant must be given on lump sum basis
adding that during each year of the 14th Finance Commission 20% of
the Local Bodies must be covered thereby covering all the local bodies in five
years.
Earlier the Finance Minister Mr. Parminder Singh Dhindsa
in his speech said that the state government enacted Fiscal Responsibility and
Budget Management act in the year 2003 and subsequently amended it to make
consistent with the Fiscal consolidation path recommended by the 13th
Finance Commission adding he said that the state has been able to meet the
Financial consolidation path targets except for Revenue Deficit. The state
government was conscious of the need to contain Revenue Deficit of the state
and has made significant effort to increase its own tax revenues and compress
non-plan revenue expenditure. As a result of the efforts of the state
government, the average tax revenue have increased from Rs 5711 crore in
2002-03 to Rs 22, 588 crore in 2012-13.
Summing up the marathon deliberations, the Chairman of
Commission Mr YV Reddy said that he was highly impressed by the meticulous
presentation of the Fiscal scenario in the state presented by the government.
He assured the Chief Minister that the Commission would thoroughly examine all
the aspects of Fiscal consolidation in a holistic manner.
The Chief Minister was accompanied by Cabinet Minister
Mr. Chunni Lal Bhagat, Financial Commissioner Revenue Mr. NS Kang, Financial
Commissioner Development Mr. Suresh Kumar, Principal Secretary Finance Mr. DP
Reddy, Principal Secretary Higher Education Mrs. Ravneet Kaur, Principal
Secretary Irrigation Mr. Sarvesh Kaushal, Principal Secretary Health Mrs.
Vinnie Mahajan, Principal Secretary Education Mrs. Anjali Bhawra, Principal
Secretary to Chief Minister Mr. SK Sandhu, Financial Commissioner Animal
Husbandry Mr. G Vajralingam, Secretary Expenditure Mr. Jaspal Singh, Secretary
Power Mr. Anirudh Tiwari, Secretary Agriculture Mr. Kahan Singh Pannu and
Director Local Bodies Mr. Priyank Bharti.
The Commission was represented by Members of the
Commission Prof. Abhijit Sen, Ms. Sushma Nath, Dr. M Govinda Rao and Dr.
Sudipto Mundle besides Secretary to Commission Mr. Ajay Narayan Jha.
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