Finance ministers’ meet to focus on Centre-state fiscal relations

Some 12 finance ministers are expected to participate in the meeting tomorrow. While some ministers arrived today, the others are expected to arrive early morning.

“The issue of distribution of taxes is likely to be discussed once again on the finance ministers’ forum, as 70 per cent is taken away by the Union government and states are left with only 30 per cent share,” said an official.

He added that it will be viewed that states should have a share of at least 50 per cent of taxes in the tax distribution. Also, as far as Central-sponsored schemes are concerned, most of the states do not benefit as they do not get the funds due to stringent conditions. The Union government should give the money straight to the state governments and give them the autonomy to decide how to spend it and where to spend it, he said.

The matter regarding revision of pay for government employees by the Sixth Pay Commission is also likely to be taken up. The states are demanding that the Central government should bear the arrears of salary of the employees itself.

Also, the switchover from VAT to GST system from April 2010 will be discussed again, besides the economic meltdown.