Punjab Finance Minister asks for more
Tribune News Service

NEW DELHI, Sept 2 — The Punjab Finance Minister, Capt Kanwaljit Singh, today urged the Eleventh Finance Commission to increase the share of states in the gross tax receipts of the Centre to 50 per cent and allow them to retain the entire collection from small saving schemes.

Speaking at an interaction meeting of state finance ministers and the Chairman of the 11th Finance Commission, Prof A.M.Khusro, here, Capt Kanwaljit Singh said the commission should take into account the new and changed circumstances under which the states were discharging their obligation.

The Himachal Pradesh Chief Minister, Mr Prem Kumar Dhumal, urged the commission to adopt a liberal attitude while granting central and other assistance for hill States while the Finance Minister of Jammu and Kashmir, Mr Mohammad Shafi, said his state was facing a serious financial crisis and the commission should make allocations keeping the requirements of the backward and special category State.

Capt Singh, in his speech, said the 10th Finance Commission had already increased the share of states in the gross tax receipts of the Centre to 29 per cent and there was a need to increase it as the country was moving towards federalism.

The Punjab Minister suggested transfer of some subjects from the Union and Concurrent List to the State List. This would help in staff and cost reductions in central ministries and greater freedom to state governments.

Capt Kanwaljit Singh was of the view that the state governments should be given freedom to devise and modify centrally sponsored schemes as per their requirement.

He said small saving schemes contributed increasingly to the finances of the states and they should be allowed to retain the entire net collection under the scheme instead of the present gap of 75 per cent. He said the limit put on borrowings by the state should be suitably increased keeping in view economic fundamentals.

The Punjab Minister also suggested that the accounts of the state be transferred from the Comptroller and Auditor General (CAG) to the State Government. The system of departmental financial advisers in the Union Government should be introduced in the states too and they should be allowed to use banking infrastructure instead of treasuries on the Government of India pattern, he added.

Capt Singh demanded a special term loan from the commission for Punjab, which was a major contributor of grains to the central pool. Being a border State, it requires special attention by the Finance Commission, he said.

Speaking on the need to modernise and strengthen the police administration, the minister suggested special allocation of funds for police administration and housing.

He demanded enhanced allocation under the Special Border Area Scheme to compensate enterprising Punjab farmers for cultivating right up to the international border.

Address revenue deficit: Dhumal
The Himachal Pradesh Chief Minister said special category states should be given weightage in respect of income-expenditure estimates, rescheduling of loans and relief and assistance in case of natural calamities.

Mr Dhumal urged the Finance Commission to solve the problem of revenue deficit of states like Himachal Pradesh. He suggested that the Finance Commission should not assess revenue receipts of public undertakings like electricity boards and transport corporations, as done by the previous commissions, as these undertakings have continuous negative contributions in plan finance management.

He said approximately 3700 mw hydel projects had been set up in the state but Himachal Pradesh had no legitimate share in it. He demanded compensation for the state in lieu of this.

Mr Dhumal was of the view that since Himachal Pradesh had put a ban on forest fellings to protect the Himalayas and in the larger interest of the country, it should be compensated for the revenue loss on this account too.

The Chief Minister said the pay scales for government employees in his state was linked to that of Punjab and urged the Finance Commission to keep this in view while taking into consideration the estimate of revenue expenditure of the State.

Mr Dhumal sought liberal assistance for the state to strengthen and modernise the police organisation as it had become important in the light of recent incidents of terrorism on the borders with Jammu and Kashmir.

J&K seeks aid for security expenses
The Finance Minister of Jammu and Kashmir said the State had incurred an expenditure of Rs 1529 crore on various security-related problems from 1989-90 till end of March, 1998, and the Centre had reimbursed only Rs 732 crore. Mr Shafi said since the state was fighting a proxy war, it was only logical that the burden of this expenditure be shared by the nation as a whole.

Mr Shafi said the state has been confronted with a serious financial crisis because of the widening gap between revenue and expenditure and the problem had worsened with the implementation of the Fifth Pay Commission recommendations.

He said debt servicing of central loans constituted a reverse flow of about 34 per cent of the devolution and transfers from the Centre on account of share of taxes and revenue gap grant. He said the position would not have been so bad had the central funds flowed to the State in the form of 90 per cent grant and 10 per cent loan right from 1960-70, as was the case in other special category states.

He urged the commission to give special consideration to the problems faced by the State on various fronts.