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BHARATHIYAR UNIVERSITY DDE M.Ed., 2014-15 APPLICATION & PROSPECTUs
7th Pay Commission – States Seek Compensation for Implementation of 7th CPC Report
Even as the Centre harped on devolving higher
share of funds to states following the recommendations of the 14th
finance commission, the latter demanded that they be given more money
and the Union government should retain its share of funding for
centrally-sponsored schemes in the upcoming Budget. States
have sought additional funds from the Centre in 2016-17 to pay for the
implementation of the Seventh Pay Commission report as well as carry on
development activities as a number of them are unhappy with the fund
devolution by the Fourteenth Finance Commission.
At a pre-budget consultative meeting here,
the State Finance ministers, in turn, asked the Centre to release the
compensation for phasing out the central sales tax. They said the
government should reappraise its role in funding social sector schemes
such as the Sarva Shiksha Abhiyan. The Centre had reduced its
contribution to such schemes after the 14th Finance Commission’s
recommendations were implemented, placing a greater burden on the
States.
The issues were discussed on Saturday at a
pre-Budget meeting called by Finance Minister Arun Jaitley with his
State counterparts.
Sources said that a number of States also
sought compensation for the implementation of the Seventh Pay Commission
report as states too will have to provide a similar hike to their
employees.
At the pre-Budget meeting with Finance
Minister Arun Jaitley on Saturday, states also sought more funds to pay
higher salary to their employees after the Centre implements the
recommendations of the Seventh Pay Commission. States suggested that the
Centre should spend more on agriculture. And as a bargain for the
proposed Goods and Services Tax (GST), states demanded the Centre should
clear all dues on account of phasing out of the Central Sales Tax
(CST).
“The committed liabilities of States will
increase and so the Centre should give use some assistance or at least
compensate us for a part of the pay hikes,” said Abdul Bari Siddiqui,
Bihar Finance Minister, adding that the State has also sought a special
category status.
This plea was echoed by Odisha, Punjab, Uttar Pradesh, Assam, Telangana and West Bengal among others.
“Tamil Nadu has been very adversely affected
due to the horizontal sharing formula recommended by the Fourteenth
Finance Commission,” said O Panneerselvam, Finance and Public Works
Minister, Tamil Nadu, adding that the Centre has also reduced its
support to Centrally Sponsored Schemes and has shifted the burden onto
States.
Tamil Nadu has 11 MPs in the Rajya Sabha and
is opposing the GST Bill. The Jayalalithaa government has hinted that
its position on GST is negotiable. Both Tamil Nadu and West Bengal will
go to Assembly polls this year. Other election-bound states – Kerala,
Assam and Puducherry – also asked Jaitley for higher allocation.
“The 14th Finance Commission had recommended
that the States that have maintained financial discipline be allowed to
borrow 3.5 per cent [of their GDP], up from 3 per cent. Since we have
maintained financial discipline, the government should allow us this
increment in borrowing. This will allow us to raise Rs. 3,000 crore more
for FY2016,” Madhya Pradesh Finance Minister Jayant Kumar Malaiya said.
Meanwhile, Talangana has sought relaxation of
borrowing limits to 3.5 per cent of the gross state domestic product
that was recommended by the Fourteenth Finance Commission.
Speaking to reporters after the meeting with
state finance ministers, Jaitley said he expected states to increase
spending on infrastructure and poverty alleviation schemes as the 14th
Finance Commission has devolved higher funds to them. “We expect that
those states whose resources have been increased after the
implementation of the 14th Finance Commission will spend further on
infrastructure creation and anti-poverty programmes since their income
have increased considerably,” Jaitley said.
State finance ministers were, however, less
conciliatory in their statements and said the Centre should uphold the
spirit of cooperative federalism and release more funds. “As many as 39
important schemes were simply eliminated in the last Budget. These
include building of model schools and police modernisation. Now we
cannot sit back. We have to build those schools and we have to modernise
the police forces, especially in a state where the threat of left-wing
extremists exists,” said Amit Mitra, finance minister of West Bengal.
Source: The Hindu
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