New Delhi: With global financial crisis putting pressure on states revenues, the VAT panel on Wednesday said it will ask Prime Minister Manmohan Singh to hold interaction with them on review of the globalisation policies and sought Rs20,000 crore of special grant from the Centre for planned expenditures.
“This one sided globalisation without any social restrain on it has created problem for the first world countries and in terms of impact on the states (Indian) also. The so called advisors and analysts may like to reorder and reorient their thinking. All components of globalisation should be totally reviewed we will be discussing this with the Prime Minister,” VAT Panel Chairman Asim Dasgupta told reporters here.
Dasgupta, who is also the Finance Minister of West Bengal, said the Centre has given 0.5% relaxation on fiscal deficit target of states so that they can go for additional borrowing of 30, 000 crore as part of the second stimulus package. But contours of this package has not been communicated to states as yet.
As additional market borrowing will put additional debt burden on sates they have also asked for additional grant of Rs20,000 crore from the Centre for planned expenditures.
He said global financial crisis have started putting pressure on state revenues and revenue growth from VAT has slowed down to 12% till December this fiscal from 22% during April -October 2008.
The panel also held discussions on proposed goods and services tax with official of the Union fiance ministry. Dasgupta said rates of GSP could only be known in March but sales tax on petroleum will not be included in it in the beginning.