CMs WANT MORE CONSULTATIVE NITI AAYOG
Chief ministers on Sunday raised concerns over the impact the goods and services tax (GST) regime was likely to have on farmers, traders and tiny and small-scale sector industries. At the NITI Aayog Governing Council meeting in New Delhi, the chief minister (CM) of Left-ruled Kerala, Pinarayi Vijayan, and his counterpart in the Bharatiya Janata Party (BJP)-ruled Rajasthan, Vasundhara Raje, spoke of the increasing irrelevance of forums like the Inter-State Council (ISC) and the NITI Aayog.
Raje said there was “a need to ensure that roles of ISC and NITI (Aayog) be clearly defined to avoid unnecessary overlaps and confusion”. ARCHIS MOHAN reports
Chief ministers on Sunday raised concerns over the impact the goods and services tax (GST) regime was likely to have on farmers, traders and tiny and small-scale sector industries.
At the NITI Aayog Governing Council meeting here, the chief minister (CM) of Left-ruled Kerala, Pinarayi Vijayan, and his counterpart in the Bharatiya Janata Party (BJP)-ruled Rajasthan, Vasundhara Raje, spoke of the increasing irrelevance of forums like the Inter-State Council (ISC) and the NITI Aayog.
Raje said there was “a need to ensure that roles of ISC and NITI (Aayog) be clearly defined to avoid unnecessary overlaps and confusion”. Vijayan said the Aayog was a poor successor and substitute to the erstwhile Planning Commission. He said the “space for constructive debate and discussion was shrinking day by day”, and forums like the ISC and the National Development Council have become “almost defunct now”. Karnataka CM Siddaramaiah said states should get more opportunities to present their issues if NITI Aayog is to become an effective forum. The meeting was attended by 28 chief ministers.
Chief ministers of Punjab (Amarinder Singh), West Bengal (Mamata Banerjee) and Delhi (Arvind Kejriwal) skipped the event. Delhi’s Deputy CM Manish Sisodia represented Kejriwal, who was busy with the civic poll elections in Delhi.
In a stinging critique of the NITI Aayog, the Kerala CM said the erstwhile Planning Commission dealt with issues of the states and “was really a forum for consultation, which to a certain extent stood apart, with some sort of a true federal spirit. Although there is the NITI Aayog now, I feel that it is in no way a real substitute for the erstwhile Planning Commission.”
The Rajasthan CM suggested that “NITI Aayog could provide impetus to resolution of issues and for setting the development agenda if subgroups/standing committees involving chief ministers of neighbouring states and Union Cabinet ministers are constituted. Sectoral and regional sub-groups are needed for amicable resolution between regions and states and the Centre and states.” She said the ISC can work as a think tank on regulation and fiscal issues and for dispute resolution, while the NITI Aayog should work as a think tank on development and social issues and undertake studies on matters of practical importance.
Vijayan said "cooperative federalism must not remain on fine print in statements and documents but remain alive and vibrant in Centre-state relations." He said to realise the 15-year vision the NITI Aayog was putting in place, it was time for "a structured mechanism for regular consultation and constant interaction among the chief ministers for outlining, discussing and strategising the goals, objectives and direction for the national economy." He said the Aayog should be a forum where fiscal matters, state-specific matters and other issues of sensitive nature can be resolved.
On the issue of GST, Raje said Rajasthan was set to clear the State GST Bill in the next Assembly session, beginning Monday. She also highlighted the need to exempt Rajasthan’s stone mining industry from high tax. Mining of marbles, granites, Kota stones and sandstones is facing a slowdown. Raje said her government had exempted sandstone from VAT, while kota stones attract two per cent and marbles and granites are taxed at 5.5 per cent. Raje said according to the 2015-16 data, 120,000 people are employed in mining of these stones and its allied industries, generating ~3,808 crore.
"Kota stone, marble, sandstone and granite are taxed at higher rates in other states. The fitment committee might decide to fit... (these products) in higher tax slabs. I request for consideration of putting marble, Kota stone, sandstone and granite in the lower slab of five per cent."
The GST Council has decided on a four-tier rate structure and the fitment committee will devise a formula for tax rates to be levied on different products and services.
Vijayan said there were concerns that after the GST rollout, the states might not be able to protect the interests of the farmers and small traders.
The Karnataka CM said compensation to states for loss of revenue, and its timely release, is important for the successful and sustainable implementation of the GST regime. “However, no provision has been made for such compensation in Union Budget for 2017-18,” he said.
Assam CM Sarbananda Sonowal said the state assembly will pass the SGST Bill at a special session to be held from May 8.
Tamil Nadu CM Edappadi K Palaniswami said his government would soon place the SGST Bill in the Assembly. He also raised concerns on compensation for loss of revenue.
Bihar CM Nitish Kumar said his state did not benefit from the greater devolution of central revenue to states after the implementation of the 14th Finance Commission recommendations. He said Bihar has received ~19,000 crore less in 2105-16 and 2016-17 for centrally sponsored schemes.
On the 14th Finance Commission devolution, Vijayan and Siddaramaiah also expressed concerns at the Centre not supporting key social welfare schemes.
Jammu and Kashmir CM Mehbooba Mufti raised the issue of safety of students from her state. Prime Minister Narendra Modi "seconded" her. He "urged states to reach out to these students (of J&K) from time to time".