The Punjab government has demanded a minimum 50 per cent share in the Central taxes.
Presenting state demands during the pre-Budget conference of finance ministers in New Delhi, Punjab’s Finance Minister Upinderjit Kaur said the states, in their joint memorandum, have requested the 13th Finance Commission to devolve atleast 50 per cent of the Central taxes to the states. But the commission has enhanced the share of the states from 29.5 per cent to 32 per cent only.
“With the successive Finance Commissions focussing attention only towards the backward states, Punjab has consistently been denied its due share in the Central taxes as compared to many other states,” added Kaur.
Kaur rued, the Fifth Finance Commission (1970-75) had recommended Punjab’s share at 2.45 per cent, but consecutive Finance Commissions thereby reduced the share to the state and the 12th Finance Commission (2005-10) further reduced it to 1.29 per cent.
She added, “It was unfair that the Union government was taking away 70 per cent of the Central taxes collected by the state and returning only 1.3 per cent.”
The Minister argued that by implementing recommendations of Fifth Pay Commission for its employees and pensioners it involves additional expenditure of Rs 7,200 crore and the State alone unable bear such a huge burden.
“The 13th Finance Commission had, also, not given any grant to the State for payment of arrears hence Central government should provide non-plan grant of atleast Rs 3,600 crore (50 per cent of total liability) to the State in 2011-12. Besides, there should be an increase of at least 30 per cent in Central assistance for Annual Plan 2011-12 of the state.”
Kaur emphasized that Government of India has fixed net borrowing limit of the State for 2011-12 at Rs 8,923 crore which should be 3.5 per cent of the projected gross state domestic product (GSDP) of the state according to the recommendations of 13th Finance Commission.
Punjab has requested the Centre, the state GSDP for the current financial year should be worked out by applying 20 per cent growth rate on quick estimates of 2009-10.
She further demanded that while working out the gross borrowings of the state, the entire repayment of loans by the state during the year should be accounted for. Hence the state requires to repay loans of Rs 2,347 crore in 2011-12.
