Finance Commission visit: West Bengal suggests alternative devolution formula
By TIOL News Service
KOLKATA, JULY 18, 2018: IT will be endeavour of the 15th Finance Commission that performance is not penalised and virtues of efficiency and equity are suitably recognised, reiterated the Chairman of the visiting 15 th Fiannce Commission, Mr. N.K.Singh, in a Press Conference in Kolkata after detailed meeting with West Bengal government. This would be a balancing act while addressing its complex Terms of Reference, he added.
Finance Commission recognizes the significant achievements made by the State Govt. in last few years in terms of key macro economic parameters viz. GSDP, debt management, Own Tax Revenue and innovaitve ways of financing. Significant strides in human development have been made specially in education and health which will have multiplier benefits for the economy. Adoption of direct tax benefit, e-bill payment has got favourable impact on long term revenue.
Notwithstanding the current growth momentum and the new initiatives taken, Mr Singh highlighted the need to consider and examine the legacy issues particularly the huge debt overhang and the need for structural measures in a manner which does not become a permanent drag on the state economy.
Commission during the detailed deliberation brought out some concerns like low capital expenditure as a percentage of total expenditure. It was assured by the state govt that there has been a substantial enhancement in capital expenditure.
State has suggested an alternative formula for devolution based on Locational Complexities and Social Backwardness, Demands Revenue Deficit Grant of Rs. 90,136 crores for 2020-25 and Grant for Infrastructure Gap funcing of Rs 1,46,692 for 2020-25.
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