BackArun Jaitley seeks states’ cooperation to roll out GST
Centre is committed to developing a national development model driven by states, said Jaitley
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New Delhi: Finance minister Arun Jaitley on Monday sought the cooperation of states to roll out the goods and services tax (GST), efficient implementation of the national food security Act and to combat inflation.
In his pre-budget meeting with state finance ministers, Jaitley said that on many GST issues, there has been a convergence of views though there are some issues that need to be resolved.
“I wish and hope that these will be sorted out sooner than later," he said.
Prospects of an early implementation of GST brightened with Bharatiya Janata Party (BJP)-ruled states such as Gujarat toning down their opposition to this indirect tax reform.
But an assured payment of central sales tax compensation to states could be the key to convincing states to embrace this singular tax reform. Many states raised the issue in the meeting.
“Most of the states have agreed to GST...protection of central sales tax revenue is important," said Saurabh Patel, Gujarat’s finance minister.
The empowered committee of state finance ministers is likely to meet at the end of this month to iron out issues on the GST design. GST aims to economically unify the country by removing all barriers for trade in goods and services among states.
Stressing the need for the Centre and states to work together closely, Jaitley said the Centre is committed to developing a national development model driven by states and promised flexibility to states in achieving this.
He also urged states to efficiently deliver their public distribution systems, learning from the best practices of other states.
For tackling food inflation, he said that there is a need to “look at the essential commodities Act and put in place strict measures and special courts to stop hoarding and black marketing".
Greater freedom on centrally sponsored schemes was also an issue raised by most states. Though the Centre has introduced the concept of flexi fund schemes where states are able to use some of the funds from the schemes according to their individual needs, states are demanding more flexibility in running these schemes.
States also expressed concern regarding some provision of the new land acquisition law and its impact of infrastructure projects and investments.
While West Bengal sought help from the Centre for restructuring its rising debt, the new Andhra Pradesh government sought funds from the government to meet its fiscal requirements.
“At the meeting, I have urged the Centre to give clear indications in the Budget on how to restructure the piling debt and also a three-year moratorium on repayment in interest and principal amount," said Amit Mitra, finance minister of West bengal.
PTI contributed to this story.
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