NEW DELHI, June 21 — In a show of solidarity cutting across political affiliations, Chief Ministers and Finance Ministers of nine states, including two allies of the ruling NDA, today urged the Prime Minister to intervene and sought remedial action to address their financial distress.

At the Chief Ministers conclave here attended by the Chief Ministers of Rajasthan, Haryana, Karnataka, Madhya Pradesh, Delhi, Goa, Deputy CM of Maharashtra and Finance Ministers of Punjab and West Bengal, the participants held the Centre responsible for the deterioration of state finances to the extent that states had to slash plan investments.

The participants at the conclave, organised by Rajasthan here, were unanimous that the states’ financial health was affected by the decision of the Centre to implement the Fifth Pay Commission report leading to additional financial burden on states which had to implement them and debt-burden caused by the huge loan component for funds released under Central Plan Assistance.

Briefing correspondents, the West Bengal Finance Minister, Dr Asim K. Dasgupta, said the conclave adopted five issues that needed immediate action on behalf of the Centre while same number of issues that need to be attended to in due course.

The Punjab Finance Minister, Capt Kanwaljit Singh, who was also present at the media meet, emphasised that the conclave had no political overtones but was bound by the common commitment to discuss “purely financial problems of states. Any other interpretation would be meaningless”.

Outlining the issues which require immediate attention, Dr Dasgupta said the conclave agreed that the Centre should release funds immediately out of the Rs 11,000 crore earmarked in the Union Budget to help states with non-plan revenue deficit, grants under the new 29 per cent scheme for devolution of central taxes, alter ratio of loan-grant component from funds under Central Plan Assistance and reduce rate of interest on loan, extended RBI overdraft facilities from present 10 days to 14 working days and extended time-period by one year for use of funds upgraded after the Tenth Finance Commission.

Among the issues which required attention in due course, were to permit states borrow from market for one year up to 50 per cent of additional burden due to pay commission, transfer Centrally sponsored schemes with funds to states, amend Constitution to allow states to impose additional service tax and extend relief under non-performance assets to cooperative banks.

In return, the states promised to help the Centre in enhancing the collection of Central taxes which has dipped during the last three years from being 8 per cent of the GDP to less than 7 per cent, he said.

Providing details, Dr Dasgupta said although the scheme for alternate devolution of central taxes was passed through Constitutional Amendment, the Centre was yet to pay the same to states.

The states, he said, would not only want the arrears from April 1, 1996 but also urge the Centre to pay the amount of Rs 3,500 crore minus the funds given under Voluntary Disclosure Income Scheme. He said otherwise the states would have to refund Rs 526 crore to the Centre.