Shillong, Sept 30: The state government is seeking Rs 1,14,745 crore as grants from the 16th finance commission for five years.
The team of the 16th finance commission met the state government on Monday.
The government has projected Rs 43,251 crore for critical sectors, Rs 69,324 as pre-devolution gap, Rs 500 crore to state public sector enterprises, and Rs 1,670 crore as grants to local bodies.
Break-up of critical sectors
Agriculture: Rs1,652 cr, Tourism Rs 3,600 cr
Road Connectivity Rs 14,750 cr, Power Rs 6,207 cr Urban Development Rs 4,820 cr, Water Rs 4,122 cr, Forest & Environment Rs 923 cr, Health & Nutrition Rs 1,880 cr Education Rs 1,940 cr, Private Sector Development Rs 500 cr, Youth Engagement Rs 1,607 cr, and Improving Standard of Administration Rs 1,250 cr.
Addressing a press conference along with the team, the Chairman of the 16th Finance Commission Arvind Panagariya said
Meghalaya is the eighth state demanding increasing vertical devolution of taxes to the state from the divisible pool from the present 41 percent to 50 percent.
Vertical devolution demand from 41% to 50%
Panagariya said, “The states’ demand was for increase in the vertical devolution from the divisible pool from 41% to 50%. Now, this is of course a figure we have been hearing in state after state and there is somehow across states seems to be a some consensus that this devolution ought to rise from 41% to 50% and normally of course finance commission does not really increase or change the shares dramatically but in any case for us it is an early stage of work so we don’t know where that is going to go.”
When asked if the demand of the states is practical, the chairman said, This is the 8th state and we have heard the 8th time for increase from 41% to 50% of the vertical devolution. Normally, the Commission in the past have never taken a very large jump as from 41% to 50%, it is an incredibly large jump.”
“The only two examples of increasing the tax devolution are what the 7th and the 14th Commissions had done but the general philosophy that the Commission has followed is that you should not disturb the status quo by excessive large amount because that then disturbs the budgets of everybody, Even those who benefit cannot absolve it fast enough but those who lose on account of such a large jump will indicate that the central government is creating imbalance suddenly and that compels the central government to react and respond” he said.
” So generally, the finance commissions, in respect of vertical devolution, moves only slowly and if they change the status quo, it is only a little bit incrementally. The same also goes for horizontal devolution as changes do happen but generally incremental but rarely these changes become steep jump.”
Referring to the submission of proposal worth Rs 1.2 lakh crore as grants by the Meghalaya goverment , Arvind said, “Grants -in-aid come from the consolidated fund of the central government. Those are tricky because currently after the 14th Finance Commission, the devolution out of the central tax revenue is extremely large. So the central government in a way exercises its discretion whether it will be from out of its own consolidated fund of India whether it is going to sanction further grants according to the recommendation of the Finance Commission,” he said.
He said horizontal devolution mandates as to how the shares are divided among the 28 states of India.
Panagariya said, “The state has some very specific suggestions and in particular the states pitched for larger proportion of the state’s share to be devolved based on forest. 15th Finance Commission had recommended 10% to forest and ecology. Meghalaya’s proposal is that we raise from 10 to 15%.”
Rural dispersion
“The Meghalaya government also suggested for introducing the new criterion called the rural dispersion of the population, to which they said two and a half to five percent weight be given and if we are able to do that then this will be new criterion as this rural dispersion has not been a criterion in the past for any finance commissions,” he said.
Earlier, the chairman informed that the commission was very impressed with the chief minister Conrad K Sangma during the presentation.
“The state has given a fantastic presentation,” he said and added, “A unique feature of this presentation was that your chief minister being who he is, made a lot of interactions during the presentation. He was very engaged one could see the passion and the engagement he has with the state’s development. We were very impressed with what we saw. The presentation itself was very extensive. It covers numerous programmes relating to the demography, geography, tourism.”
CM’s presentation
The chief minister highlighted reduction in the maternal mortality rate.
Referring to the Maternal Mortality Rate (MMR), which was double than the national average in 2018, the chief minister said, “We introduced a holistic programme (MOTHER) through which we identified high risk pregnant women, and the challenges for high mortality and introduced a programme for care and safe institutional deliveries”.
“Maternal mortality is linked to social issue, infrastructure and other services, including spacing of birth between two children,” he said.
According to the chief minister, the government has been able to tackle the challenges and introduced corrective measures, which has led to a decline in the MMR and IMR in the state.
On laying the foundation for the growth and development, the chief minister said that through the XVth Finance Commission, the state was awarded Rs 3000 crore, and through Externally Aided Projects (EAPs), the state managed to get funding of around Rs 9000 crore to initiate development and infrastructure projects.
“Through partnership that were forged with international banks, institutions, universities like Berkeley, the state has been able to include intellectual and technology partners for a shared objective to further the development and growth aspirations of the state,” he said.
Handing over the memorandum of the state to the XVIth finance commission chairman, the Chief Minister also spoke on the importance of the meeting, which will enable the state to further continue its mission to push forward the growth and development of the state.
“We look forward to the XVIth finance commission for consideration of our memorandum and support us adequately towards realising our vision for Meghalaya,” the chief minister said.
During the day-long meeting, the XVIth finance commission had separate meeting with representatives of trade and industry, rural local bodies( district councils), urban local bodies and political parties.
