Punjab demands special package hike in states' share to 50pc in taxes from Fin Commission

    Chandigarh, Jul 22 (PTI) The Punjab government on Monday sought a special package of Rs 1.32 lakh crore from the 16th Finance Commission, asserting that the border state should be rewarded for its immense contribution in making the country self-sufficient in food production and also in obtaining and preserving independence.
     The state government also demanded that the states should get 50 per cent of taxes collected by the Centre as their share, instead of 41 per cent at present.
    The 16th Finance Commission (FC), led by its chairman Arvind Panagariya, is visiting Punjab, which is the third state after having gone to Himachal Pradesh and Chhattisgarh.
     The mandate of the commission, which is formed every five years, is to make recommendations for the proportion of distribution of central taxes between the Centre and the states.
    During a meeting with the 16th Finance Commission here, Punjab Chief Minister Bhagwant Mann strongly pitched for a special package for the state.
    Mann sought funds of Rs 1,32, 247 crore comprising funds worth Rs 75,000 crore for development, Rs 17,950 crore for agriculture and crop diversification, Rs 5,025 crore for checking stubble burning, Rs 8,846 crore for tackling narco terrorism and drug abuse and Rs 6,000 crore for industry revitalization.
    In a statement, Mann said that Rs 9,426 crore should be given to urban local bodies and Rs 10,000 crore for rural local bodies.
    Due to the immense contribution of Punjab in making the country self-sufficient in food production, obtaining and preserving independence, the state should be given a special economic package, stressed Mann.
     "Punjabis have already carved a niche for themselves in every country across the globe and the package will further give impetus to economic growth of the state," he said.
     He expressed hope that the FC will give a sympathetic view to the genuine demands of the state government and generously allot funds to Punjab.
    Meanwhile speaking to the media, Panagariya said Mann gave the general overview of Punjab on economic and finance fronts.
     The state finance secretary talked about the challenges facing Punjab, in which he discussed issues relating to growth, how the state's economic growth has been slower than the average growth in all the states.
     Panagariya said, "The key mandate of the finance commission is to make recommendations on how the central taxes, which are sharable, should be divided first between the Centre and 28 states and then whatever is the kitty of 28 states, how that should be divided among the 28 states."
    "The first division is the division between the Centre and 28 states taken together is called vertical division. Second, the division of kitty among 28 states is called horizontal division or horizontal devolution," he said.
    "The recommendation or the demand from the state of Punjab on this was as far as vertical devolution is concerned should be increased in favour of the states from its current level of 41 per cent to 50 per cent, meaning that whatever taxes that are shareable, 50 per cent of those should go to the states and 50 per cent to the Centre as opposed to what is the current division which is 41 per cent to the states and 59 per cent to the Centre," he added.
    On the horizontal devolution, the chairman said the state demanded some changes in weightage given to criteria like population and area for division of funds.
    To a question on power subsidy in Punjab, Panagariya said the discussion on subsidy was part of an overall deficit and debt. "The largest part of the subsidy was power and that has been rising rapidly," he pointed out.
    To a question on revenue deficit grant, Panagariya said it is too early to reply the same as the commission is yet to visit other states.
    "General the FC gives revenue deficit grants. But how much it will be and to which states it will be given, all this will be known after the assessment of states," he stated.
    To a question on the Punjab government's claim of withholding of certain funds by the Centre, the FC chairman said such complaints have come from other states as well. "But it is the Centre which is to take a decision," he said.
    The Punjab government has alleged that the Centre had withheld its rural development fund and funds for national health mission.
    Referring to the meeting with the FC, the CM said the state government has embarked on a journey of reforms aimed at bringing efficiency, transparent governance, and robust economic growth.
     In the last two years alone, the state's own tax revenue witnessed an impressive growth by surpassing national growth rates. The GST revenue has gone up by 33 per cent and excise alone has gone up by more than 50 per cent.
    In addition to legacy problems, the state has unique challenges currently not being faced by any other state, said Mann.
    Being a border state, Punjab is incidental to narco-terrorism and hostile border activity due to which a large number of Police force is recruited, he said.
    On another issue, Mann said the hard-working farmers of the state produced food for the country by over-exploiting its only available natural resources in terms of fertile soil and water.
    Almost all the blocks of the state have gone into dark zones as far as the groundwater is concerned due to which the water of the state is rapidly depleting, he said.

(This story has not been edited by THE WEEK and is auto-generated from PTI)