States may revive 'conclave politics': Asim Dasgupta - Business Standard

Despite a substantial gain reaped from the 13th Finance Commission’s recommendations, the states are trying to come together to demand a much higher share of tax revenue from the Centre. Asim Dasgupta, chairman of empowered committee of the state finance ministers, indicated they might revive the ‘conclave politics’ of the 1980s. The committee will meet in the first week of April to discuss this and then place its demands before Union Finance Minister Pranab Mukherjee. The meeting with the Union minister had already been fixed, he informed.

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From the estimates made by Dasgupta, West Bengal stands to gain substantially from the awards and recommendations of the 13th Finance Commission. Its total award of tax and grant for the next five years will be Rs 1,17,000 crore, compared to Rs 51,000 crore awarded by the 12th Finance Commission. Yet, the award falls much short of the “states’ requirement and expectations,’’ as there has been a marginal increase of 1.5 per cent of the tax share from its present 30.5 per cent to 32 per cent. All states individually and then through the empowered committee of state finance ministers demanded the tax share be raised to 50 per cent, and this was placed before the Finance Commission on September 16, 2008. “There is a mismatch between the responsibility and revenue share. The states have to bear 80 per cent or more responsibility in discharging development activities, and yet, the Centre takes two-third of the total tax collection,” observed Dasgupta. Sates want it to be raised to 50 per cent.

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