Punjab seeks economic federalism for all states

December 4th, 2008 - 9:46 pm ICT by IANS  

Chandigarh, Dec 4 (IANS) Seeking economic federalism for all states in the country, the Punjab government Thursday urged the 13th Finance Commission that states should get at least 50 percent share from the gross central receipts and taxes collected.The plea was made during a meeting of the state’s top brass, including Chief Minister Parkash Singh Badal, with the Finance Commission led by its Chairman Vijay L. Kelkar here.

The government sought a “special agriculture and industry package” for the state in view of the extraordinary contribution of Punjab to the national food kitty and constraints suffered by it due to industrial concessions given to the neighbouring states.”

Badal said that “economic federalism” was required to help the states in accelerating development initiatives in line with the national objective.

Highlighting the issue of border area farmers in Punjab, Badal sought that the belt touching the hostile international border with Pakistan should be treated as “special national zone” where people must be compensated on the development front for the sacrifices they have been making “in the overall national interest”.

Badal said that the formula for devolution of central funds should be recast to make it commensurate with the contribution of each state to the central taxes rather than making it dependent on the size of population or geography.

The chief minister stated that Punjab had lagged behind in overall growth after the state went through a prolonged period of terrorism (1982-1995). “Still, Punjab farmers have been contributing the maximum to the country’s food pool,” he added.

The Finance Commission members asked the Punjab government to make its tax collection system more effective. It asked the government to do away with subsidies, especially the power subsidy to farmers.

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