Views sought on changing financial year to JanDec, simultaneous polls
Prime Minister Narendra Modi on Sunday asked states to work with the Centre as “TeamIndia” to introduce the goods and services tax (GST) in time. He also sought their views on changing the financial year to January December (from April to March), as well as simultaneous general and Assembly polls.
Chairing the NITI Aayog´s Governing Council meeting, which also comprises chief ministers, he sought their views on the threeyear agenda prepared by the body.
This lays emphasis on reforms in governance and taxes, with higher spending on health and education.
Its 15 year vision document envisages tripling the country´s real (adjusted for inflation) gross domestic product (GDP) and per capita income by 2031- 32.
If GDP grows at this rate, every one should ideally have access to at least a two wheeler and an air conditioner in 15 years, the document says.
The PM was also in favour of putting in place the same start and closing dates for a Pay Commission and a Finance Commission.
He also suggested states that they check institutions from encroaching on each other´s domain.
Prime Minister Narendra Modi with BJP President Amit Shah, External Affairs Minister Sushma Swaraj and party leaders in New Delhi on Sunday.
Apart from the NITI Aayog Governing Council meet, Modi also met chief ministers of 13 BJPruled states, who gave presentations on work done by their governments, especially in implementation of social welfare schemes .
Chief ministers on Sunday raised concerns over the impact the goods and services tax (GST) regime was likely to have on farmers, traders and tiny and smallscale sector industries.
At the NITI Aayog Governing Council meeting in New Delhi, the chief minister (CM) of Leftruled Kerala, Pinarayi Vijayan, and his counterpart in the Bharatiya Janata Party (BJP)ruled Rajasthan, Vasundhara Raje, spoke of the increasing irrelevance of forums like the InterState Council (ISC) and the NITI Aayog.
Raje said there was “aneed to ensure that roles of ISC and NITI (Aayog) be clearly defined to avoid unnecessary overlaps and confusion”. Modi said the legislative arrangements at the state level for GST should see no delay.
Revenue Secretary Hasmukh Adhia, who made a presentation, added his urging.
Parliament has cleared four GST Bills but states are yet to clear their respective ones. Modi termed the final consensus on GST as being in the spirit of cooperative federalism.
He said the vision ofa “New India” could be realised only through the combined effort and cooperation of all states.
He gave credit to all CMs for finally coming togetherontheissue, keeping a side ideological and political differences.
He said there were suggestions to have the financial year from January to December.
He wanted states´ reactions and also suggested they take initiative on the idea.
The PM said old ways of governance must change.
He asked states to hasten on capital expenditure and infrastructure development, with the Union Budget for the current financial year already effected on allocation, thanks to the presentation of accounts having been pushed forward.
He also mentioned the ending of the distinction between Plan and nonPlan expenditure, based on the recommendation of the Rangarajan committee report of 2011. Several important items of expenditure were included as nonPlan and hence neglected, he said. The emphasis would now be on distinguishing between development and welfare expenditure on the one hand and administrative overheads on the other.
He said there had beena40 per cent increase in overall fund allocation to states from 201415 and 201617, while the proportion tied to central schemes had declined from 40 per cent earlier to 25 per cent of the enhanced total.
The PM said the theme of regional imbalance was raised byanumber of CMs. This had to be addressed on priority, both nationally and within states. He urged states, local governments, and nongovernment bodies to decide goals for 2022 and work inamission mode to achieve these.
The PM also told the Aayog to look at issues like how to reduce urea usage by 10 per cent by 2022.
He called upon states to use the Government eMarketplace initiative to reduce corruption and increase transparency in procurement.
He said the use of technologies such as BHIM and Aadhaar would result in significant savings for states. Chief ministers on Sunday raised concerns over the impact the goods and services tax (GST) regime was likely to have on farmers, traders and tiny and small-scale sector industries.
At the NITI Aayog Governing Council meeting in New Delhi, the chief minister (CM) of Left-ruled Kerala, Pinarayi Vijayan, and his counterpart in the Bharatiya Janata
Party (BJP)-ruled Rajasthan, Vasundhara Raje, spoke of the increasing irrelevance of forums like the Inter-State Council (ISC) and the NITI Aayog.
Raje said there was “a need to ensure that roles of ISC and NITI (Aayog) be clearly defined to avoid unnecessary overlaps and confusion”. Vijayan said the Aayog was a poor successor and substitute to the erstwhile Planning Commission. He said the “space for constructive debate and discussion was shrinking day by day”, and forums like the ISC and the National Development Council have become “almost defunct now”. Karnataka CM Siddaramaiah said states should get more opportunities to present their issues if NITI Aayog is to become an effective forum. The meeting was attended by 28 chief ministers.
Chief ministers of Punjab (Amarinder Singh), West Bengal (Mamata Banerjee) and Delhi (Arvind Kejriwal) skipped the event. Delhi’s Deputy CM Manish Sisodia represented Kejriwal, who was busy with the civic poll elections in Delhi.
In a stinging critique of the NITI Aayog, the Kerala CM said the erstwhile Planning Commission dealt with issues of the states and “was really a forum for consultation, which to a certain extent stood apart, with some sort of a true federal spirit. Although there is the NITI Aayog now, I feel that it is in no way a real substitute for the erstwhile Planning Commission.”
The Rajasthan CM suggested that “NITI Aayog could provide impetus to resolution of issues and for setting the development agenda if sub-groups/standing committees involving chief ministers of neighbouring states and Union Cabinet ministers are constituted. Sectoral and regional sub-groups are needed for amicable resolution between regions and states and the Centre and states.” She said the ISC can work as a think tank on regulation and fiscal issues and for dispute resolution, while the NITI Aayog should work as a think tank on development and social issues and undertake studies on matters of practical importance.
Vijayan said "cooperative federalism must not remain on fine print in statements and documents but remain alive and vibrant in Centre-state relations." He said to realise the 15-year vision the NITI Aayog was putting in place, it was time for "a structured mechanism for regular consultation and constant interaction among the chief ministers for outlining, discussing and strategising the goals, objectives and direction for the national economy." He said the Aayog should be a forum where fiscal matters, state-specific matters and other issues of sensitive nature can be resolved.
On the issue of GST, Raje said Rajasthan was set to clear the State GST Bill in the next Assembly session, beginning Monday. She also highlighted the need to exempt Rajasthan’s stone mining industry from high tax. Mining of marbles, granites, Kota stones and sandstones is facing a slowdown. Raje said her government had exempted sandstone from VAT, while kota stones attract two per cent and marbles and granites are taxed at 5.5 per cent. Raje said according to the 2015-16 data, 120,000 people are employed in mining of these stones and its allied industries, generating Rs 3,808 crore.
"Kota stone, marble, sandstone and granite are taxed at higher rates in other states. The fitment committee might decide to fit... (these products) in higher tax slabs. I request for consideration of putting marble, Kota stone, sandstone and granite in the lower slab of five per cent."
The GST Council has decided on a four-tier rate structure and the fitment committee will devise a formula for tax rates to be levied on different products and services.
Vijayan said there were concerns that after the GST roll-out, the states might not be able to protect the interests of the farmers and small traders.
The Karnataka CM said compensation to states for loss of revenue, and its timely release, is important for the successful and sustainable implementation of the GST regime. “However, no provision has been made for such compensation in Union Budget for 2017-18,” he said.
Assam CM Sarbananda Sonowal said the state assembly will pass the SGST Bill at a special session to be held from May 8.
Tamil Nadu CM Edappadi K Palaniswami said his government would soon place the SGST Bill in the Assembly. He also raised concerns on compensation for loss of revenue.
Bihar CM Nitish Kumar said his state did not benefit from the greater devolution of central revenue to states after the implementation of the 14th Finance Commission recommendations. He said Bihar has received Rs 19,000 crore less in 2105-16 and 2016-17 for centrally sponsored schemes.
On the 14th Finance Commission devolution, Vijayan and Siddaramaiah also expressed concerns at the Centre not supporting key social welfare schemes. Jammu and Kashmir CM Mehbooba Mufti raised the issue of safety of students from her state. Prime Minister Narendra Modi "seconded" her. He "urged states to reach out to these students (of J&K) from time to time".
The Business Standard New Delhi, 24th April 2017
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