Centre urged to convene NDC meet

By Our Special Correspondent

BANGALORE, AUG. 11. The Chief Minister, Mr. S.M.Krishna, has urged the Prime Minister, Mr. Atal Behari Vajpayee, to convene a meeting of the National Development Council (NDC) or the Inter- State Council to discuss the situation arising out of the raw deal meted out to some States by the 11th Financial Commission.

In a letter to Mr. Vajpayee today, Mr. Krishna said there was a scope to give some relief to those States which had got a raw deal from the commission. After the Fifth Pay Commission recommendations, the finances of the State were under tremendous strain. Although the State had requested assistance to withstand the pressure on this account, the Centre had not responded to this pleas so far.

Financial assistance had been given to those States which had entered into an MoU with the Government of India because of the Ways and Means problemss. Those States which were carefully managing the finances did not get any assistance, Mr. Krishna said.

He said the State had expected that at least the 11th Finance Commission's recommendations would improve the State's financial position for the next five years.

The recommendations of the Commission as agreed to by the Centre and placed before Parliament had come as a ``big shock and disappointment to our State''.

The tax devolution had been given as compensation to the States which were not managing their finances properly. ``We expected the 11th Finance Commission to change the gap-filling approach and give proper weightage to good performance. This expectation has not been fulfilled,'' Mr. Krishna added.

Mr. Krishna said the Commission had given 4.93 per cent share in the devolution to the State, whereas it had been 5.33 per cent by the 10th Finance Commission.

If the T.F.C. formula for devolution was adopted, the State would have got an additional Rs. 1,165.78 crores over five years. The reason for this reduced share was because of weightage given to per capita GSDP criteria and less weightage to tax effort. This meant the States which had a healthy growth rate of GSDP and contributed to the economy of the country got a lower allocation, he said.

Mr. Krishna said there was no appreciable debt relief grant to States such as Karnataka. The formula recommended by the 11th Finance Commission would not yield debt relief to Karnataka this year as revenue expenditure of the State had increased enormously following the wage revision of government employees, and there had been no corresponding increase in revenue receipts.

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Section  : Southern States
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