Wants state to decide VAT limit

The CPI(M) wants the states to be given the freedom to exceed the minimum VAT limit, arguing that there is "very little elbow room" available to them to garner resources as VAT rates are given to them and their borrowing limits are also determined by the Centre.

It also wants the Fiscal Responsibility and Budget Management Act to be scrapped as it puts "bizarre constraints" on necessary revenue spendings and erodes the powers and authority of state governments.

These issues figured prominently in the CPI(M) note on the Planning Commission's Approach Paper to the Eleventh Plan, submitted to Prime Minister Manmohan Singh on Saturday.

To democratise Centre-State relations, the Left party has proposed that all international treaties including Free Trade Agreements must be ratified by Parliament, and where they have heavy impact on the fortunes of the states, by the National Development Council (NDC).