The government has failed to deliver on its promise to give 42% of gross tax revenues to States, Congress member Jairam Ramesh said in the Rajya Sabha on Wednesday. He said the government needed to issue an explanation since it was a breach of promise.
“When this government announced that 42% of gross tax revenues will be devolved to the States, it was hailed as a game-changer by the Prime Minister and we all expected that this recommendation would actually be implemented in practice. In the year which will end on March 31, the fiscal year 2019-20, not 42 but 30% of gross tax revenues will be devolved to the States,” Mr. Ramesh said.
The government owed this House an explanation why a commitment made that 42% of tax revenues would go to States had actually become only 30%. “It is a breach of a commitment made in Budget speeches and by no less a person than the Prime Minister himself,” he added.
The Congress member also flagged that States which had been performing better than others were being “penalised” by the 15th Finance Commission. “I wish to point out that States where the per capita income is growing faster than the national average like Karnataka and Kerala are at a serious disadvantage because they find their shares falling. I would urge you to take this matter seriously,” he added.
Terms of reference
The Finance Commission’s terms of reference were also reworded by the government to saying that the Commission should now look at how expenditure for internal security and defence should be earmarked. “This would ultimately result in lowering of the amount of money that would be transferred from the Centre to the States,” Mr. Ramesh added.
He reiterated the stand of southern States which have been slamming the 15th Finance Commission for putting them in “great disadvantage.”
