NEW DELHI: IN order to address issues relating to the debt burden of the states, there was a demand for setting up a committee of state finance ministers made in the Rajya Sabha by Members of Parliament (MP) on Tuesday. The MPs demanded that the committee should be headed by the Union Finance Minister and the government has indicated its agreement to the proposal. Derek O’Brien, Rajya Sabha MP and member
of the Trinamool Congress said that several states like Uttar Pradesh, Gujarat, Tamil Nadu, West Bengal, Madhya Pradesh and Kerala have huge debts. Urging the Centre to give these states ‘some level of confidence’ and create a committee of state finance ministers to look into the issues, he said that maintaining these states were being burdened to pay back the debt. In his reply, finance minister Arun Jaitley said that the issue had been raised recently in the inter-state council as well, including by West Bengal chief minister Mamata Banerjee.
Emphasising the importance of a ‘prudent fiscal policy’, Jaitely pointed out that expenditure has to be planned according to limited resources available, while adding that a committee as sought by Derek O’Brien could be formed.
The finance minister also emphasised that two-thirds of the Central Sales Tax (CST) amount has been provided to states and the remaining one-third would also be discharged.
He also asserted that after the 14th Finance Commission, there has been a siginificant increase in the amount provided to the states by the Centre.
Jaitley added that while the amount delivered for some specific schemes may have come down, overall the funds provided to states have been substantially increased.
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