Various states today demanded that the Union government should provide additional funds to pay for implementing the Sixth Pay Commission recommendations.
At the pre-Budget consultations between Union Finance Minister Pranab Mukherjee and the state finance ministers, many state representatives also said they would not increase the value added tax (VAT) rates to 5 per cent.
The finance minister, however, didn’t give any commitment but only heard what the ministers had to say.
Various states also raised their own issues and demanded financial help from the Centre accordingly. Delhi, represented by A K Walia, sought additional Central funds for the expansion of the Delhi Metro rail network. Madhya Pradesh Finance Minister Raghavji asked for special status for the development of the tribal regions of the state.
Kerala, West Bengal and Tripura — the three Left-ruled states — asked Mukherjee to ensure more employment opportunities and control price rise through his Budget.
Goa Chief Minister Digambar Kamat later told Business Standard: “Many states including Goa have asked for the Centre’s help to meet the additional burden over the Sixth Pay Commission recommendations. We want the Centre to bear at least 50 per cent of the additional expenses.”
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Haryana Finance Minister Ajay Singh Yadav asked the Centre to provide more to meet the recommendations of the Sixth Pay Commission, which costs the state exchequer to the tune of Rs 6,000 crore.
Mukherjee reminded the states that some of them are holding large cash balances and highlighted the need to utilise these in development activities. He also pointed out that the states never got so much money as the Centre’s contribution before the UPA came to power.
He stated the impact of the overall fiscal stimulus and other measures “have started showing results on the GDP growth”.said a finance ministry release “The finance minister observed that high levels of public spending and decline in revenue streams have resulted in deviation from the Fiscal Responsibility and Budget Management targets and highlighted the need to return to a path of fiscal consolidation at the earliest without compromising the growth momentum and in the long term interest of the economy.”
In the meeting, Mukherjee invited the views of the states on a new system of fertiliser subsidy, which may involve a direct transfer of subsidy to the farmers and also a system which promotes nutrient-based subsidy regimes. He also said the government wanted to “replicate the successful models of NREGA in other areas to eliminate the stigma of having the highest number of poor people in our country”.