No injustice to state in fund allocation, says Jaswant Singh

Gujarat wants performance-based financial assistance from the Centre

Union finance minister Jaswant Singh said the Centre has not done any injustice to the Gujarat government while allotting funds.

Speaking at a discussion organised by the Gujarat Chamber of Commerce and Industry (GCCI), Singh said funds to different states were allocated on the basis of the recommendations made by the Finance Commission and after consultations with the Planning Commission.

Earlier, GCCI president Shreyas Pandya had raised the issue of allocation of funds to states, stating that injustice has been done to Gujarat.

The state government had made representations to both the finance and planning commissions, seeking allotment of central funds on the basis of performance of states.

At the 'Vibrant Gujarat-Global Investors' Summit' last September, the state government had said more "progressive" states must be given larger funds.

Pandya said although the central government does not allot funds, as this is done by the Finance Commission and the Planning Commission, a proposal was put forward that more progressive states be given larger funds.

"The finance minister said the Vajpayee government has not done any injustice to any state. The Finance Commission is an independent body, which decides allocation of funds to states," Pandya said.

Singh assured central assistance for the ambitious 'Sujalam Sufalam' water project of the state government.

The state government is planning to solve the surface and ground water crisis permanently by implementing the project.

Under the project, which will cost over Rs 6,000 crore, ground water will be replenished and surface water preserved.

The project, kicked off earlier this year, is expected to be completed by December 2005.

Delivering a lecture on 'How India can be an economic super power', Singh said India will become the third largest economic super power in the next three to five years, provided there is a change in the mindset of people.

"India has been transformed into an economy of surplus from an economy of shortage. The country has become an exporter of foodgrains and our foreign exchange reserves stand at $112 billion," Singh said.

Commenting on India's growing importance in the world community, Singh said since 1998, economic sanctions were imposed by a number of countries following the nuclear tests conducted by India.

"However, the situation has completely changed now and India is getting more support for its demand for a permanent seat in the UN Security Council," he said.

Earlier, in his welcome speech, Pandya said some issues that needed to be addressed to make India an economic superpower were improving public finance, development and modernisation of infrastructure, creating more employment, rationalisation of income tax and service tax rates and reduction of stamp duty.