CM Badal welcomes larger state share in central taxes

  • HT Correspondent, Hindustan Times, Chandigarh
  • Updated: Feb 25, 2015 22:25 IST

Punjab chief minister Parkash Singh Badal on Wednesday welcomed the Union government's decision to enhance the states' share in central taxes from 32% to 42% in the wake of 14th Finance Commission recommendations. Badal termed it the first step towards financial autonomy to states.

In a statement here, Badal, however, added that this would have substance only if the funds meant for the states under the centrally sponsored schemes were also transferred directly to states as untied funds. "Along with this increase, the states must know how the centrally sponsored schemes (CSS) would now be transferred to states after the Planning Commission has been scrapped and replaced with NITI Aayog.

He said the Shiromani Akali Dal (SAD) has been a strong votary of greater financial autonomy to states in true federal spirit, claiming that the BJP-led NDA has won a nationwide mandate in favour of its commitment to federalise the Indian polity and to give a lion's share to the states from its kitty of central taxes.

Badal also stressed the need for provision of liberal investments in the form of direct central grants to states that were actively engaged on restructuring their agricultural economy through diversification. He said that agriculture-allied activities like dairy, fishery, piggery and bee-keeping must be given promotional incentives such as income tax exemption on a par with agriculture.

The CM also reiterated the demand for the minimum support prices (MSP) for alternative crops in place under the Swaminathan formula with assured marketing on the pattern of wheat and paddy.

The amount of funds devolved to the states as per this announced hike in the states' share in central taxes would go up from `3.48 lakh crore in 2014-15 to `5.26 lakh crore this fiscal, putting the states on a strong fiscal pedestal, according to Badal.

Planning board vice-chairman hails move too

Chandigarh: Punjab state planning board vice-chairman Prof Rajinder Bhandari on Wednesday hailed the Centre's move to hike the states' share in central taxes, saying that this would strengthen the states in designing and implementing their schemes more effectively.

"With this, the share of Punjab in central taxes would increase approximately from Rs 20,000 crore to Rs 62,000 crore in a five-year period," Bhandari added.

"It is a very bold and visionary step by Prime Minister Narendra Modi that is bound to strengthen the country's federal structure. All states, with Punjab in front, have been crying for sufficient resources at their disposal for the past many years, demanding greater share from the central kitty," he said.

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