Punjab doesn't deserve special economic package: EAC Member
Renowned economist and member, Economic Advisory Council to PM, M Govinda Rao, said Punjab didn't have very strong ground to get a special economic package from the Centre as it had totally ignored the Centre's persistent advisories on rationalising freebies.punjab Updated: Aug 02, 2012 13:20 IST
Renowned economist and member, Economic Advisory Council (EAC) to the prime minister, M Govinda Rao, said Punjab did not have very strong ground to get a special economic package from the Centre.
Rao said the state had totally ignored the Centre's persistent advisories on rationalising freebies.
"Since 1990, several studies have been conducted by different economic institutions. In all these studies, the state government has been told to rationalise its subsidies. In two of the studies, I had also directed Punjab to curtail its subsidies on food and power. But the state has not paid any heed to the recommendations at all," stated Rao.
Rao was in the Punjabi University, Patiala to deliver a lecture on 'fiscal reforms'.
He said the 13th finance commission had put Punjab, along with West Bengal and Kerala, in a special category of states, which strongly needed rationalisation of taxes and were lagging behind in tax collection.
"The state has been offering freebies like lollypops. When you don't want to change the subsidy policy and keep ignoring the Centre's directives on tax collection why should you be given the special economic package?" asked Rao.
Raising a doubt over the state's "faulty tax system", Rao said the taxpayer's money couldn't be given to Punjab to run its populist schemes.
The economist pooh-poohed the state's claim on the package citing its troubled militancy period in the 1990s.
"It's like blackmailing the centre. Not just Punjab, the states like West Bengal and Chhattisgarh are demanding help by citing the Naxal activities. Punjab must show solidarity by cutting the subsidies and increasing the tax collection," said Rao.
Rao also dismissed the suggestions that the centre was treating states like municipal councils.
"It's a hollow statement. What is Punjab doing to its municipal councils? It has taken over most of the rights of tax collection from the local bodies. Punjab is just trying to hide its failures," he said.