State to urge 13th Finance Commission for more funds

A 16 member team of the 13th Finance Commission, headed by Vijay L Kelkar today arrived in Orissa.

The team includes Indira Rajaraman, emeritus professor, National Institute of Public Finance and Policy, BK Chaturvedi, member, Planning Commission, Atul Sharma, former vice-chancellor, Rajiv Gandhi University, Sanjeev Misra, Sumit Bose, Secretary to the Commission.

The 13th Finance Commission will take into consideration the impact of the implementation of the Goods and Services Act (GST) with effect from April 1, 2010. It will also consider the need to improve the quality of public expenditure for better outcomes.

The commission will look into such issues as management of ecology, environment and climate change consistent with sustainable development, which is a subject of national concern. It will also make recommendations pertaining to the distribution of the net proceeds of taxes between the Union government and the states. The recommendations of the Commission will cover 5 years from April 1, 2010 and the report is expected by October 31, 2009. During their 5 day visit to the state from 24 to 28 February, the Commission will meet the representatives from the cross section of the society and hold discussion with the officials of the state government on 26 February.

The visit assumes importance as the Orissa government will urge the Finance Commission to take into account both the plan and non-plan revenue expenditure of the state instead of the non-plan revenue expenditure only while deciding the devolution of resources. Besides, it will demand for adoption of a normative basis for assessing the fiscal needs of the state.

The commission will also be impressed to take into account the state’s efforts towards fiscal correction and efforts to implement strategies to ensure inclusive growth particularly for the disadvantaged sections. Orissa will seek special dispensation in the devolution of the resources from the Finance Commission in view of the high rate of poverty and concentration of scheduled caste and scheduled tribe population in the state.

Though the share of the states in the tax devolution recommended by the Finance Commission is fixed by a set of criteria containing equity and efficiency parameters, the state will demand economic backwardness and underdevelopment to be given due weightage by the Commission.