Naidu Unhappy Over 29 Per Cent Tax Devolution Formula
Andhra Pradesh chief minister N Chandrababu Naidu yesterday expressed his unhappiness over the Inter-State Council decision to restrict the states share in the Central tax pool to 29 per cent.
We accepted this with a heavy heart, Naidu told newspersons. He demanded that the Centre should allow transfer of 33 per cent of Centres gross taxes revenue to states in lieu of all existing transfers on the revenue account from the next fiscal. Ultimately, half the Central tax pool collections should accrue to the states within a set time limit, Naidu said.
He said the Inter-State Councils standing committee will meet again in Delhi in December to finalise the modalities for such transfers.
Stating that non-devolution of powers, both financial and administrative, went against the very spirit of federalism, Naidu said the CMP (common minimum programme) had clearly underscored this aspect.We have had four sittings of the committee so far but still we have been able to come only to 29 per cent from last years 26.6 per cent. In some years we got 27 per cent. This does not take us anywhere. We are not happy, Naidu, who is a member of the committee, said.
He said the states tax sources were drying up while the Centre was coming up with new taxes like the service tax and higher corporate tax.
We continue to manipulate with our commercial tax, motor vehicles tax and the like. How long can this go on, he asked.On Article 356 of the Constitution, Naidu admitted that the decision of the Standing Committee to retain the provision went against the stand of the Telugu Desam Party.
We are still against it. But we have to compromise at some point, he said, adding that the standing committee had laid down adequate safeguards in this regard, which would be taken up at a full meeting of the council.
According to Naidu, the safeguards were:
The state government concerned should be first served with a show-cause notice; reply to be filed with in seven days.
Specific reasons for the recommendation should be spelt out.
The state assembly should not be dissolved under any circumstance. Only Parliament shall have the power to decide on the dissolution of an Assembly. Where such a decision is taken by Parliament, fresh elections should be held within a period of six months from devolution.
Parliament should ratify, by a two-thirds majority, the decision within 30 days. In case Parliament is not in session, a special session should be convened for the purpose.