TWELFTH FINANCE COMMISSION MEETS
STATE FINANCE MINISTERS AND CHAIRMEN & MEMBERS OF PREVIOUS
FINANCE COMMISSIONS
The Golden Jubilee
function marking the completion of fifty years of Finance Commission
was inaugurated in the forenoon of 9th April, 2003
by the Hon’ble President of India, Dr. A.P.J. Abdul Kalam. This
was followed by a meeting of the Twelfth Finance Commission with
the Finance Ministers of states at 2.00 P.M. in Vigyan Bhawan.
The meeting was held under the Chairmanship of Dr. C. Rangarajan,
Chairman, TFC, Shri Sompal, Shri T.R. Prasad, and Prof. D.K. Srivastava,
Members and Dr. G.C. Srivastava, Secretary of the Twelfth Finance
Commission were also present.
The meeting commenced
with the launching of the official website of the Twelfth Finance
Commission by Dr. C. Rangarajan who also released a Commemorative
Volume brought out by the Commission captioned ‘Fifty years of
Fiscal Federalism’. The volume contains extracts from the reports
of the First to the Eleventh Finance Commissions comprising their
terms of reference, issues and approaches, summary of recommendations
etc.
Chairman, Twelfth
Finance Commission, outlined the agenda of the meeting and sought
the views of the States on vertical and horizontal devolution,
desirable proportion of taxes and grants in the Finance Commission’s
award, assignment of funds to the panchayats, sustainable levels
of debt and norms for the states to raise revenues etc.
Most States demanded
a steep enhancement of the vertical devolution of Central taxes
to States, appropriate compensation for loss on account of VAT,
consideration for the impact of the Fifth Pay Commission’s recommendations
and a pragmatic scheme of debt relief including reduction in interest
rates, moratorium and rescheduling of loans for easing the resource
constraints of the States. They also wanted the special problems
of their respective States to be kept in view while assessing
their expenditure requirements. Chief Ministers of Uttranchal,
Assam and Manipur, Dy. Chief Minister of Meghalaya and Finance
Ministers of Gujarat, West Bengal, Maharashtra, Rajasthan, Arunachal
Pradesh, Tripura, Jammu & Kashmir, Nagaland, Ministers of
Uttar Pradesh, Himachal Pradesh, Chattisgarh, Orissa and Bihar
attended the meeting. Andhra Pradesh, Goa, Haryana, Karnataka,
Kerala, and Tamil Nadu were represented by their Chief Secretaries/Finance
Commissioners/Principal S! ecretaries.
Chairman Twelfth
Finance Commission thanked the participants and assured a detailed
discussion on specific problems during the Commission’s visits
to the states.
The Twelfth Finance
Commission met the Chairmen and Members of the previous Finance
Commissions on the following day, 10th April, 2003
at 10 A.M. in Vigyan Bhawan. Chairman, Twelfth Finance Commission,
asked the participants to share their experience with regard to
the considerations that have gone into their recommendations on
their terms of reference including vertical and horizontal devolution
of Central taxes, determining the relative weights of taxes and
grants and augmenting the resources of local bodies. He also emphasized
the need for coordination in the working of Planning and Finance
Commissions as the plan resource transfer is largely in the term
of loans, the servicing of which adds to revenue expenditure.
The participants
expressed concern at the deteriorating fiscal health of both the
Centre and the States and offered suggestions to balance the different
criteria for sharing of resources. The Chairmen and Members of
the previous Finance Commissions included Shri NKP Salve, Dr.
B.S. Minhas, Shri R. Ramachandran, Dr. C.H. Hanumantha Rao, Shri
V.B. Eswaran, Shri Justice T.P.S. Chawla, Shri G.C. Baveja, Shri
Mahesh Prasad, Shri B.P.R. Vithal, Shri M.C. Gupta, Shri Arun
Sinha, Shri N.C. Jain, Shri J.C. Jetly, Dr. Amresh Bagchi and
Shri T.N. Srivastava.
Chairman, TFC, thanked
the participants for their views and assured them that the Commission
would keep them in view while formulating their recommendations.
