Niti governing council meet: Modi asks states to raise capex, infra spend

Calls for debate on simultaneous elections; says consensus on GST a spirit of cooperative federalism

Prime Minister Narendra Modi on Sunday exhorted state chief ministers to speed up capital expenditure and infrastructure creation, now that the Budget had been passed and funds were available from the start of the year. He also called for a debate on simultaneous elections, and termed the consensus on the Goods and Services Tax (GST) a spirit of cooperative federalism.

In his opening remarks at the third meeting of the Niti Aayog governing council, the prime minister said: "This (change in the Budget presentation date) would enable timely availability of funds at the beginning of the financial year." 

Earlier, he said the budgeted scheme funds were generally not approved by Parliament till May, after which they would be communicated to states and ministries. By that time, the monsoon arrived. Hence, the best working season for schemes was typically lost. 

He also mentioned the ending of the distinction between plan and non-plan expenditure, based on the recommendation of the Rangarajan Committee in 2011, which had found the distinction to be counter-productive. 

Several important items of expenditure were included as ‘non-plan’ and hence neglected, he said, adding hereafter the emphasis would be on distinguishing between development and welfare expenditure on one hand, and administrative overheads on the other. 

The prime minister mentioned that while there has been a 40 per cent increase in overall fund allocation to states between 2014-15 and 2016-17, the percentage of funds tied to central schemes has declined from 40 per cent of the earlier total, to 25 per cent of the enhanced total with a corresponding increase in the untied share. 

He said the GST shows the strength and resolve of the federal structure. 

He gave credit to all chief ministers for coming on one platform for this cause, keeping aside ideological and political differences. 

Modi said consensus on GST will go down in history as a great illustration of cooperative federalism. 

He said GST reflects the spirit of “One nation, One aspiration, One determination.” 

The prime minister said he is convinced that the vision of “New India” can only be realised through the combined effort and cooperation of all states and chief ministers. 

He said “Team India” has once again assembled today to discuss and reflect on ways to prepare India for changing global trends.

Niti Aayog is working on a 15 year long term vision, 7 year medium term strategy, and 3 year action agenda. From this financial year, five year plan process has been bid adieu after 12th plan came to an end on March 31, 2017.

The prime minister said the new process needs support of states, and will eventually reflect in benefits to States.

The Governing Council meeting is being held in the Rashtrapati Bhavan for the first time.