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We want 50-50, say some states

On the face of it, the 13th Finance Commission has recommended a higher share of the divisible pool from Central resources to states, but regional governments gave muted reaction on Thursday, as a call to return to a zero-revenue deficit regime by 2011-12 carried a message that could imply spending cuts and taxation.

business Updated: Feb 25, 2010 22:17 IST
HT Correspondent

On the face of it, the 13th Finance Commission has recommended a higher share of the divisible pool from Central resources to states, but regional governments gave muted reaction on Thursday, as a call to return to a zero-revenue deficit regime by 2011-12 carried a message that could imply spending cuts and taxation.

Most states are struggling with huge deficits due to the implementation of the Sixth Pay Commission.

Asim Dasgupta, finance minister, West Bengal and chairman, empowered group of state finance ministers, said, “The states have to handle 80 per cent of the development activities and the Centre collects two-thirds of the tax revenue. The states had demanded a 50 per cent share of the Central tax revenue. Unfortunately, it has been an insignificant increase.”

Deputy Chief Minister and Bihar Finance Minister Sushil Kumar Modi said, “Increase in tax share is a welcome step but it is below expectations.” His views were echoed by Punjab Finance Minister Manpreet Singh Badal, who said, “This is very-very marginal increase.”

Maharashtra Chief Secretary J.P. Dange said, “The state will benefit in a great deal because of increased share from the Central revenue pool.”

“The commission’s recommendations for PSUs are uncalled for,” said Kerala Finance Minister Thomas Issac.