States seek less Centre schemes

State governments on Wednesday urged the Centre to reduce the number of centrally-sponsored schemes and transfer funds to autonomous bodies only through them.

Some of the states also made their apprehensions clear about sharing any financial burden for implementing the Food Security Act.

While the states came with a long list of demands in pre-Budget consultations and sought a growth-centric Budget, Finance Minister Pranab Mukherjee sought their support in meetings the challenges posed by high inflation, increasing fiscal deficit and slowing growth.

Most said there was a need to focus on growth in rural areas and provide more resources and facilities in education and health sector. States said recommendations of the BK Chaturvedi committee on reducing the number of centrally sponsored schemes from 147 to 59 and suggestions of the Rangarajan panel on efficient management of public expenditure should be implemented.

They suggested classification of expenditure into plan and non-plan be re-looked.

“The states having the larger incidence of poverty are also the poorest states in India and, hence there should be proper budgetary provision by the Central government for implementing the landmark Food Security Bill,” said Sushil Modi, deputy chief minister of Bihar. The states also said banking services, especially regarding sanction and non-sanction of loans to individuals, should be placed under Citizens’ Charter so that the time limit is fixed for delivery of specific services.

The participants said that the Government should consider fiscal incentives to spur investment.

Many State Finance Ministers were of the view that the Union Budget for 2012-13 should be growth-centric and employment centric as the country could not afford to have jobless growth. It was stated that the focus should be on issues pertaining to boost agriculture production, urban infrastructure facilities and power development among others. Some Finance Ministers highlighted the need for higher investment in providing affordable housing, drinking water facilities, irrigation, flood management, welfare of minority communities and those living in hills and the north east.

The meeting was attended by the Chief Minister of Meghalaya; Deputy Chief Ministers of Bihar and Jharkhand and Finance Ministers and other Ministers of Andhra Pradesh, Arunachal Pradesh, Chhattisgarh, Gujarat, Haryana, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Sikkim, Tamil Nadu, West Bengal and Delhi.

Minister of State for Finance, Namo Narain Meena, Adviser to FM, Secretary (Economic Affairs), Secretary (Expenditure), Secretary (Financial Services), Chief Economic Advisor and Chairman, CBDT were also present in the meeting.

Seeking support of the states in meetings challenges posed by high inflation, increasing fiscal deficit and slowing growth, the finance minister emphasised that in a federal country like India, states and Centre complement each other in managing the fiscal policy and the economy.

He stated that with a significant scaling-up of the development efforts in social sectors in the past few years, higher transfer of resources to the states and the growing integration of the domestic market, there was an urgent need for harmonising the economic policies at different levels.

The finance minister further stressed that as the country entered the 12th Plan period in 2012-13, there was a need to balance the need for higher government expenditure for supporting improved and inclusive growth and the imperative of fiscal prudence.