Govt buys time with warring chief ministers

NEW DELHI, AUGUST 21: The Central government has bought time with the warring State Chief Ministers led by Chandrababu Naidu over the reco...

NEW DELHI, AUGUST 21: The Central government has bought time with the warring State Chief Ministers led by Chandrababu Naidu over the recommendations of the Eleventh Finance Commission EFC. After a late night meeting with the Prime Minister on Monday, chief ministers of eight states have decided to wait for the second report of the EFC, to be submitted shortly, before deciding on their future course of action.

Briefing newsmen after the meeting with the Prime Minister, Naidu said that the states would await the supplementary report of the Commission which is expected to be submitted shortly. However, Naidu said that the states would pursue their demands, if they are not met, in the supplementary report.Acirc;micro;Eralier, at the CMs8217; meeting, chief ministers had demanded that the EFC recommendations be kept in abeyance. The Chief Ministers of eight States including representatives from Maharashtra and Tamil Nadu asked for a special meeting of the inter-state council to go into the matter. Till this was done, all loans and grants to states should take place on an ad hoc basis, they demanded.

All told, the 8 states in today8217;s meeting could stand to lose a combined Rs 20,000 crore, or thereabouts in a period of 5 years. While Maharashtra would lose Rs 6,918 crore, Punjab would lose Rs 1,469 crore. Similarly, Haryana would lose Rs 1,153 crore, Gujarat Rs 5,031 crore and Goa Rs 372 crore.

After the meeting, the chief ministers met Finance Minister Yashwant Sinha and Prime Minister Atal Bihari Vajpayee as well.

The eight states represented in today8217;s meeting were Andhra Pradesh, Kerala, Punjab, Haryana, Assam and Manipur. All states were represented by their chief ministers, except for Tamil Nadu whose law minister represented attended the meeting and Maharashtra, represented by Deputy Chief Minister Chhagan Bhujbal.

Addressing the media, Naidu said the eight states would demand consideration of 8220;equity8221; and 8220;8217;efficiency8221; as criteria for devolution of central revenues.Acirc;micro;8220;There is inconsistency because the Prime Minister, Finance Minister, Planning Commission and the government are all talking about economic reforms and second generation reforms, but the EFC report is to the contrary,8221; Naidu stated. 8220;We are only concerned about the economic issues and we would never make this a political agenda,8221; he added.

The states have demanded that the EFC8217;s ceiling of transfer of 37.5 per cent of central taxes to the state government should be made the minimum. The states have also demanded that the cut-off period for determining poverty should be 1991 and for population, it should be 1981. The states also want an adequate share in the surcharges collected by the Centre, he said.

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Kerala Chief Minister E k Nayanar said that the ceiling of 37.5 per cent fiscal transfer from the Centre to States would not stand constitutional scrutiny. The Commission had overlooked genuine performers like Kerala, he added.

Haryana Chief Minister Om Prakash Chautaula felt that the Central government had miserably failed in coming to the rescue of states which were heavily burden by the recommendations of the fifth Pay Commission. Chief Ministers of all states should have been consulted before accepting the recommendations of the Commission, he remarked.