People's Democracy

PUNJAB

Special Debt Relief And Higher

Allocations Sought For Punjab

The Punjab State Committee of the Communist Party of India (Marxist) has demanded increased share in the devolution of Central taxes and special debt relief for the state in addition to the general debt relief given to states.

In a representation to the 12th Finance Commission, the party has expressed concern at the rising debt liability of the state which stood at a whopping Rs 32, 496 crore at the end of 2002. The interest payment itself mounted to Rs 3,500 crore in 2003.

The representation said the debt swap scheme of the union government would not be able to lighten the burden much. It also brought to the notice of the commission that a huge part of this debt was incurred in fighting the separatist terrorist movement and so the state’s case for special debt relief is very strong.

As regards the declining share of the state in the devolution of the Central taxes, the party pointed out that it was cut to 1.147 per cent by the 11th Finance Commission as compared to 1.461 per cent recommended by the 10th Finance Commission, on account of change in the formula for determining inter se share of the states, which gave unduly more weightage to per capita income and index of infrastructure while giving reduced weightage to population.

The representation demanded that apart from restoring 20 per cent weightage to population, a new factor of degree of industrialisation should be added and given due weightage for apportionment of Central taxes among states.

The party also expressed apprehension that the proposal that commercial viability of irrigation and power projects would be made the basis of recommendation by the commission, would militate against the interests of the peasantry. Irrigation and power projects should be kept as public enterprises and the government should rather increase public investment in them, the party said adding that reasonable subsidy be continued in irrigation and electricity charges.

Apart from the state-specific demands, the party urged that fiscal transfer to the states as percentage of the gross revenue receipts of the Union Government should be increased to a minimum of 40 per cent. "A just, equitable, prudent and rational scheme of fiscal transfer in a federal polity should satisfy the overriding principle that the stronger union can be built only upon stronger constituent states. It should also satisfy another obligation, that all citizens of India enjoy a minimum standard of services."