Punjab welcomes increase in states' share in central taxes

The Centre's decision to increase states' share central taxes will help put the states on "strong fiscal pedestal" to carry out development programmes as per peoples' needs, Punjab Chief Minister Parkash Singh Badal said today.
While welcoming the move to accept the 14th Finance Commission's recommendations for hike in share of states in central taxes, Badal demanded that funds meant for states under the present 'Centrally Sponsored Schemes' should also be transferred directly to states as "untied funds".
In a statement issued here, Badal said Shiromani Akali Dal (SAD) has been a strong votary of greater financial autonomy to the states in true federal spirit.

"BJP-led NDA government has won a nationwide mandate in favour of commitment to federalise the Indian polity and to give a lion's share to the states from its kitty of central taxes," he said.
The Centre has accepted the recommendations of 14th Finance Commission which has recommended a record 10 per cent increase in the states' share in the Union taxes to 42 per cent.
The Punjab government had been demanding that the share of states in the net proceeds of shareable central taxes be enhanced from 32 per cent to 50 per cent so as to provide states with ample funds for carrying out development expenditure.

Badal also stressed on the need for liberal investments in the form of direct central grants to states that were actively engaged on restructuring their agricultural economy through diversification.

Agriculture allied activities such as dairying, fisheries, piggery, goatry, bee keeping etc must be given promotional incentives such as income tax exemption on par with agriculture, he said.
Similarly, MSP for alternative crops under the Swaminathan Commission formula with assured marketing must be put in place on the pattern of wheat and paddy, he said.
Describing the decision to raise states share in central taxes as a positive development, the Chief Minister said that the amount of funds to devolve to the states would go up from Rs 3.48 lakh crore in 2014-15 to Rs 5.26 lakh crore during the current fiscal.

"This will help in putting the states on strong fiscal pedestal to enable them to carry out their development programmes according to the needs of the people," he said.
However, Badal said this was just the beginning and the momentum would need to be carried forward in the years to come with more steps to make the states truly autonomous in matters of policy planning and implementation for regional development as per specific needs of the people.