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Centre should consult states often on fiscal differences : Manmohan Singh

Former Prime Minister Manmohan Singh. Photo: HTPremium
Former Prime Minister Manmohan Singh. Photo: HT

  • Singh said if states get the feeling that the Centre was robbing them of the resources due to them, it didn’t bode well for federal polity
  • Singh also released the book 'Challenges to Indian fiscal federalism' authored by Kerala Finance Minister T M Thomas Isaac, R Mohan and Lekha Chakraborty

The central government should consult state chief ministers as often as possible on fiscal matters where they disagree to preserve the idea of cooperative federalism, former Prime Minister Manmohan Singh said on Saturday.

Speaking at a conference in the national capital, organised by the Gulati Institute of Finance and Taxation (GIFT), an independent body under the Kerala government, Singh said if states get the feeling that the central government was robbing them of the resources due to them, it didn’t bode well for federal polity.

The former prime minster was speaking on the expansion of the mandate given to the Fifteenth Finance Commission (FFC) in July to see if there was a need to set up a separate mechanism for funding defence and internal security.

The FFC has to submit it's recommendations by the end of November. States do not want proposals on allocation of central government's tax revenue that will affect the quantum of funds to be shared with them. At present, the central government transfers 42% of its divisible pool of tax revenue to states.

"I respectfully urge the authorities that they take the view that they will go to chief ministers if there is any controversy relating to the terms of reference of the FFC. The Centre should consult states as often is necessary," Singh said.

FFC has been holding meetings with states to arrive at a formula for allocation of funds for the five years starting April 2020.

Singh also released the book 'Challenges to Indian fiscal federalism' authored by Kerala Finance Minister T M Thomas Isaac, R Mohan and Lekha Chakraborty, on the ocassion.


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