CENTRAL GOVERNMENT
COMMITTED TO IMPROVING STATES’ FINANCES
The Union Minister
for Finance and Company Affairs, Shri Jaswant Singh has stated
that the Central Government is committed to improving the fiscal
situation of the states. He said that a High Level Committee had
been constituted for this purpose and the Prime Minister, Shri
Atal Behari Vajpayee also met the Chief Ministers recently to
evolve a consensus on various steps to be taken in this regard.
The Finance Minister was speaking at the meeting of the Consultative
Committee of Members of Parliament attached to the Ministry of
Finance and Company Affairs.
Referring to
the Debt Swap Scheme proposed by the Central Government, the Finance
Minister said that it is proposed to retire states’ debt of Rs.
25,000 crore in the first phase of the Scheme. The Minister said
that there was a broad consensus on the introduction of VAT and
a number of state governments had already enacted legislation
in this regard. He said that the Government of India would introduce
a Bill in the ensuing session of Parliament for amendment to Article
269 of the Constitution to enable implementation of VAT from April
1, 2003 in the entire country. He requested the support of the
Members of Parliament for the passage of the Bill.
The Minister
said the state governments had also held meetings with the RBI
Governor regarding the state finances. Some of the Centrally Sponsored
Schemes were being transferred to the state governments. However,
the Minister cautioned that since 80 per cent of the plan expenditure
is based on borrowed funds, there is need to ensure that it remains
within reasonable limits. Responding to the concern expressed
by some Members of Parliament regarding reports of starvation
deaths in the country, the Minister said that these were serious
issues and would be addressed.
Members of Parliament
discussed steps to improve the fiscal situation of states and
gave their recommendations in this regard. It was suggested that
wasteful expenditure can be reduced by downsizing government staff,
closing down or privatizing uneconomic enterprises in the states
and undertaking administrative reforms to streamline some of the
multiple and overlapping schemes that were being implemented.
Members of Parliament also suggested that the state governments
need to take responsibility and ensure fiscal discipline. Members
pointed out that states which have a low revenue base should continue
to get assistance from the Central Government. Members also suggested
there is a need to carry out reforms in the power sector. Some
Members underlined the need to develop agro and village based
industries, encourage self help groups and strengthen Panchayati
Raj institutions to bring about greater economic growth in the
rural areas.
The meeting was
also attended by the Union Ministers of State, Shri Annandrao
V. Adsul and Shri G.N. Ramachandran. The Members of Parliament
who attended the meeting included Dr. Nitish Sengupta, Shri Raviprakash
Verma, Shri Trilochan Kanungo, Shri Moinul Hasan, Shri B.B. Ramaiah,
Shri Nawal Kishore Rai, Shri Mohan Rawale, Shri Parmeshwar Kumar
Agarwalla, Shri C.P. Thirunavukkarasu, Shri R.P. Goenka, Shri
Eknath Thakur, Shri Rajeev Shukla, Shri Murli S. Deora, Shri Janardhana
Pujari, Shri Santosh Bagordia and Shri Ashwani Kumar.
