Finance commission should not give excessive weightage to backwardness and incentive should be given for better performance, demanded Maharashtra's chief minister Ashok Chavan.
He was making opening remarks before the members of 13th commission led by its chairman Vijay Kelkar who heard Maharashtra government's views on distribution of central government funds at Sahyadri state guest house here today.
"Excessive weightage has traditionally been given to factors like economic backwardness. Time has come to give due weightage to factors like tax collection efforts, fiscal discipline and decentralisation. This would truly reward states that perform", he said.
Maharashtra's share in the divisible pool has steadily declined over the years from high of around 14.28 per cent to 4.63 per cent as a result of award from 11th finance Commission's award. Such a sharp decline has serious disincentive effect and leads to a feeling that progressive states do not get their due despite demonstrating better fiscal prudence and efficient administration, Chavan pointed out.
He also asked for more share for the states in the service tax as 60 per cent of Gross State Domestic Product (GSDP) comes from service and this also means lesser space available for state tax revenues.
He also appealed the commission to pay special attention to Mumbai's need, which both central and state government want to develop as the international finance centre which will act as the engine of country's economic growth.
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