Not even the wickedest FM can tweak state tax share: Nirmala Sitharaman

Referring to recent remarks by Opposition leaders of southern states collectively demanding their rights, Sitharaman said: “It’s now getting into this very dangerous threshold of ‘southern states together’. You had a responsible Member of Parliament, brother of Deputy Chief Minister of Karnataka say ‘We’ll have a separate southern state’. It cannot go to that extent… I cannot for a moment stand next to anybody who says ‘We in the southern states’, then demand.”

She said she cannot give favourable or unfavourable terms of reference for the Finance Commision. “…this time particularly, I have kept it to the minimum so that the Finance Commission takes a call. States, please sit with the Finance Commision, work it out,” she said.

On the rising share of cesses and surcharges of the Central government, which does not become part of the divisible pool with states, Sitharaman said the Constitution permits the Centre to do so. “Would you then change the Constitution? The Constitution permits me to levy cess and surcharge. For everything else, the Constitution but for this, no Constitution… the Central government has every right to levies such as surcharge and cess,” she said.

The Union Finance Minister, who was in conversation with Anant Goenka, Executive Director, The Indian Express Group, and P Vaidyanathan Iyer, Executive Editor, The Indian Express, at the Adda, said there may be issues domestically, but what worries her is how things would change externally.

“Is it the war, not one, two, is it the uncertainty, Red Sea or is it just going to end to fester, those are the things. The crude oil price today or tomorrow, the natural gas price today or tomorrow, fertiliser price, today or tomorrow, those are the worries,” she said.

Asked which domestic issue she is most concerned about among jobs, monopolies, privatisation, rural consumption, and private investments, Sitharaman chose: private investments.

She also said there is absolutely no whisper of corruption against the Narendra Modi-led government. “It is only because of the stability in policy, the predictability in the taxation, the inclination towards greater reforms and transparency, and absolutely no whisper of corruption has made India attractive,” she said.

On the upcoming Lok Sabha elections, Sitharaman said good numbers in both the Houses of the Parliament will help India. “There cannot be a temptation now to experiment with ‘Can it be a coalition government?’, ‘Can it be a lesser numbers government?’. No, it is such a critical time for India. It cannot be playing around with the numbers. We need the strength in the House,” she said.

The government will focus on the next generation reforms but a lot can be done at the level of states than Centre, she said. “Everything is not in the court of the Union government. What is otherwise possible through state governments can be done at that level. There are issues which are very peculiar to some states. Many things are happening in the states and many states are doing it at such speed, it is going to set the track for many others to follow. It need not always be the Centre who does it… the consensus can come through the states,” she said.

On the role of investigative agencies probing businesses, and some of them terming those actions as ICED (Income Tax, CBI and ED), Sitharaman said the government does not have an issue with purchases through tax-paid money but if that’s not the case, then agencies will do their work.

“Agencies should not work? They will go after every fellow who has got black money. Be ICED… I don’t mind if they are doing it with white money. Let them get it (houses) anywhere. South Pole. Moon. Please buy it with tax-paid money. But if you go with other kinds of money, of course I’ll be after you. If we don’t, India will be put on the grey list of FATF. Once you’re on the grey list, your investments are not going to happen. Nobody is going to come with money in your country,” she said.