Sunday, Sep 08, 2002
Sunday, Sep 08, 2002 |
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By Our Special Correspondent
At a meeting here today between the Empowered Committee of State Finance Ministers and Mr. Singh, the States accepted "as a beginning" the Centre's proposal to retire the States' debt which attract 13 per cent plus interest but found the quantum inadequate and wanted improvements in terms of interest and capital relief. The West Bengal Finance Minister, Asim Dasgupta, who is convener of the Empowered Committee, told presspersons after the meeting that the present scheme covered only Rs. 1,10,000 crores out of the total outstanding debt of Rs. 5,80,000 crores of all the States put together. The combined interest burden of the States works out to Rs. 69,000 crores annually out of which the scheme would provide relief of Rs. 1,000 crores only. The States found this to be inadequate, Mr. Dasgupta said. Consequently, it was decided that the high-power Centre-States committee, headed by Mr. Jaswant Singh and comprising the Finance Ministers of six States, would work out improvements to the debt swap scheme, in time for the proposed meeting that the Prime Minister, Atal Behari Vajpayee, would have with the Chief Ministers to address the States' fiscal difficulties. This meeting is likely to be held within a month, Mr. Dasgupta said. On granting more powers to the States to levy taxes, today's meeting decided that in time for the Prime Minister's meeting with the Chief Ministers, modalities and legislative changes required for transfer of power to the States to levy service tax would be worked out. The specific items on which the States would have power to levy service tax would also be worked out within this timeframe. Another demand of the States was that the funds for Centrally-Sponsored Schemes (CSSs), which would be transferred to them, should go to the consolidated fund of the State and not the project implementing agency or the banks. According to Mr. Dasgupta, it was decided that the Union Finance Ministry would work out with other Central Ministries concerned the details of transferring such funds to the States directly. On the possible diversion of funds by the States for other uses, Mr. Dasgupta said a clause had been added that money to the implementing agencies would reach them within one month of the transfer of funds from the Centre. About the reduction in non-plan expenditure growth of the Centre and the States, today's meeting decided to leave the issue to the Prime Minister and the Chief Ministers since this involved politically sensitive decisions on curbing dearness allowances, bonus, etc. of the Central and State Government employees. The States also raised another issued at today's meeting. This pertains to the Supreme Court orders on sub-ordinate judiciary which would involve considerable financial outgo in terms of higher salaries for judicial officers and other service conditions plus increasing the number of judges. While the States would discuss this issue in their respective legislatures, the Centre was requested to place additional points before the Supreme Court in this matter.
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