States have responsibilities, but not resources: Hooda

December 10th, 2008 - 6:57 pm ICT by IANS  

Chandigarh, Dec 10 (IANS) Seeking a greater share of the revenue generated by the centre for states, Haryana Chief Minister Bhupinder Singh Hooda Wednesday said that while the states have been assigned a wide range of functions and responsibilities, they were not allocated matching resources.Addressing the north-western regional workshop on “Re-thinking Centre-State Relations in India” here, Hooda suggested that the share of states in the revenue generated by the central government through taxes should be 50 percent instead of the present 30.5 percent recommended by the 12th Finance Commission.

“Centrally-sponsored schemes should be formulated keeping in view the unique set of priorities and problems of each state for optimum utilization of resources,” Hooda said.

“An imbalance exists between the allocation of fiscal resources and responsibilities between the central and state governments in the country. The central government is endowed with most of the elastic and buoyant sources of revenue. On the other hand, state governments had been assigned wide range of functions and responsibilities without matching resources,” he added.

To resolve the problem of fiscal federalism, Hooda recommended the need to devise a fiscal devolution mechanism which helps state governments to balance their resources with expenditure.

“The states, on an average, raise about 34 percent of revenue and incur 57 per cent of expenditure,” the chief minister said.

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