Bhopal: Centre raised such taxes as it doesn’t have to share with the state: Kamal Nath

Bhopal: Chief Minister Kamal Nath told the Finance Commission that the Centre would seek grants from the state for the projects to be launched under New India scheme. Nonetheless, as the scheme is Centre’s brainchild, the projects should be financed by it.

He also said as the Centre has increased such taxes from which they do not have to give share to the states. Earlier, the amount of such taxes was 10%, but now, it has gone up to 18%, so the states are incurring losses, he said

Similarly, the Centre should not use the word devolution of grants to states, as according to the Constitution the word that should be used for the purpose is sharing and distribution.

In the meeting between state government and Finance Commission, the government demanded increase in the state’s share in Central taxes from 42 to 50%.

The government also demanded Rs 6721 crore as compulsory grant for the loss in Central taxes, tribal welfare, education, health and agriculture. Performance incentive has also been demanded for the work done in social sector.

Nath also said that the FC should think about creating inter-state equality and that each state has its own characteristics. One state cannot be compared with another merely on the basis of a formula.

MP is a tribal-dominated state where minerals and forest wealth is found in abundance, Nath said, adding that a lot of money is spent in conservation of forest wealth and it also causes loss to revenue.

The chief minister said the maintenance of forests also affects developmental activities, and hence, there should be separate policy for it.

Chief Minister Nath said allocation of tax revenue should be done according to the conditions of the states otherwise it would lead to disparities. Nath said MSP may benefit farmer but it is doubling the cost of agriculture. All these things should be considered while allocating funds to the states.
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