Prime Minister Narendra Modi on Sunday asked states to work with the Centre as “Team India” to introduce the goods and services tax (GST) in time. He also sought their views on changing the financial year to January-December (from April to March), as well as simultaneous general and Assembly polls.
Chairing the NITI Aayog’s Governing Council meeting, which also comprises chief ministers, he sought their views on the three-year agenda prepared by the body. This lays emphasis on reforms in governance and taxes, with higher spending on health and education. Its 15-year vision document envisages tripling the country’s real (adjusted for inflation) gross domestic product (GDP) and per capita income by 2031-32.
If GDP grows at this rate, every one should ideally have access to at least a two-wheeler and an air conditioner in 15 years, the document says.
The PM was also in favour of putting in place the same start and closing dates for a Pay Commission and a Finance Commission. He also suggested states that they check institutions from encroaching on each other’s domain.
Modi said the legislative arrangements at the state level for GST should see no delay. Revenue Secretary Hasmukh Adhia, who made a presentation, added his urging. Parliament has cleared four GST Bills but states are yet to clear their respective ones. Modi termed the final consensus on GST as being in the spirit of cooperative federalism. He said the vision of a “New India” could be realised only through the combined effort and cooperation of all states. He gave credit to all CMs for finally coming together on the issue, keeping aside ideological and political differences.
He said there were suggestions to have the financial year from January to December. He wanted states’ reactions and also suggested they take initiative on the idea.
The PM said old ways of governance must change. He asked states to hasten on capital expenditure and infrastructure development, with the Union Budget for the current financial year already effected on allocation, thanks to the presentation of accounts having been pushed forward.
He also mentioned the ending of the distinction between Plan and non-Plan expenditure, based on the recommendation of the Rangarajan committee report of 2011. Several important items of expenditure were included as non-Plan and hence neglected, he said. The emphasis would now be on distinguishing between development and welfare expenditure on the one hand and administrative overheads on the other.
He said there had been a 40 per cent increase in overall fund allocation to states from 2014-15 and 2016-17, while the proportion tied to central schemes had declined from 40 per cent earlier to 25 per cent of the enhanced total. The PM said the theme of regional imbalance was raised by a number of CMs. This had to be addressed on priority, both nationally and within states. He urged states, local governments, and non-government bodies to decide goals for 2022 and work in a mission mode to achieve these. The PM also told the Aayog to look at issues like how to reduce urea usage by 10 per cent by 2022. He called upon states to use the Government e-Marketplace initiative to reduce corruption and increase transparency in procurement. He said the use of technologies such as BHIM and Aadhaar would result in significant savings for states.
Mentioning the District Mineral Fund, the one for compensatory afforestation and the construction workers welfare fund, her said these would be a significant boost to state resources. And, asked the Aayog to come up with a plan for better utilisation of such funds.
The body is working on three-year action agenda and a 15-year long-term vision document, to replace the earlier five-year Plan process. The PM said this needed support of states.
The body has suggested 300 specific action points on accelerating of economic growth. These formed part of a presentation made by its vice-chairman, Arvind Panagariya.
“The first segment of the three-year action agenda will have details on how the country’s expenditure can be increased on health, agriculture, etc,” he said.
Broad outlines of the 15-year vision document envisage, among other things, housing for all with toilets, cooking gas, electricity and digital connectivity, access to two-wheelers or cars, air conditioners, and other such “white goods” for nearly all, a literate population with access to health care, a much larger and modern network of roads, rail, waterways and air connectivity, and a clean India, with cleaner air in cities and villages.
Aayog Chief Executive Officer Amitabh Kant apprised the gathering of the work done by the think-tank on transforming the economy and cooperation with states in education, health and infrastructure.