Punjab Govt Demands Rs 1.32 lakh crore From Finance Commission, 50% Share in Central Taxes

Chandigarh: Making an appeal to the 16th Finance Commission, the Punjab government sought a special package amounting to Rs 1.32 lakh crore, highlighting the state's pivotal contribution to achieving “national food self-sufficiency” and “safeguarding independence”.

Bhagwant Mann Govt Demands Rs 1.32 Lakh Crore 

The state government also demanded that the states should get 50 per cent of taxes collected by the Centre as their share, instead of 41 per cent at present.

The 16th Finance Commission (FC), led by its chairman Arvind Panagariya, is visiting Punjab, which is the third state after having gone to Himachal Pradesh and Chhattisgarh.

The mandate of the commission, which is formed every five years, is to make recommendations for the proportion of distribution of central taxes between the Centre and the states.

During a meeting with the 16th Finance Commission here, Punjab Chief Minister Bhagwant Mann strongly pitched for a special package for the state.

Mann sought funds of Rs 1,32, 247 crore comprising funds worth Rs 75,000 crore for development, Rs 17,950 crore for agriculture and crop diversification, Rs 5,025 crore for checking stubble burning, Rs 8,846 crore for tackling narco terrorism and drug abuse and Rs 6,000 crore for industry revitalization.

In a statement, Mann said that Rs 9,426 crore should be given to urban local bodies and Rs 10,000 crore for rural local bodies.

On another issue, Mann said the hard-working farmers of the state produced food for the country by over-exploiting its only available natural resources in terms of fertile soil and water.

Almost all the blocks of the state have gone into dark zones as far as the groundwater is concerned due to which the water of the state is rapidly depleting, he said. 

Meanwhile, Arvind Panagariya, Chairman of 16th Finance Commission said that Chief Minister Mann gave the general overview of Punjab on economic and finance fronts.

The state finance secretary talked about the challenges facing Punjab, in which he discussed issues relating to growth, and how the state's economic growth has been slower than the average growth in all the states.

Panagariya said, "The key mandate of the finance commission is to make recommendations on how the central taxes, which are sharable, should be divided first between the Centre and 28 states and then whatever is the kitty of 28 states, how that should be divided among the 28 states." "The first division is the division between the Centre and 28 states taken together is called vertical division. Second, the division of kitty among 28 states is called horizontal division or horizontal devolution," he said.

"The recommendation or the demand from the state of Punjab on this was as far as vertical devolution is concerned should be increased in favour of the states from its current level of 41 per cent to 50 per cent, meaning that whatever taxes that are shareable, 50 per cent of those should go to the states and 50 per cent to the Centre as opposed to what is the current division which is 41 per cent to the states and 59 per cent to the Centre," he added.

To a question on power subsidy in Punjab, Panagariya said the discussion on subsidy was part of an overall deficit and debt. "The largest part of the subsidy was power and that has been rising rapidly," he pointed out.

To a question on revenue deficit grant, Panagariya said it is too early to reply the same as the commission is yet to visit other states.

"General the FC gives revenue deficit grants. But how much it will be and to which states it will be given, all this will be known after the assessment of states," he stated.

To a question on the Punjab government's claim of withholding of certain funds by the Centre, the FC chairman said such complaints have come from other states as well. "But it is the Centre which is to take a decision," he said.