New Delhi : With growth revival topping its agenda, the NDA government has started the exercise of holding pre-budget consultations with various stakeholders. Union finance minister Arun Jaitley held the first such meeting with the finance ministers of states and the union territories to gather their inputs for budget formulation.
Outlining the government’s approach and its concerns, Jaitley said that the revival of the economy is the task before “Team India.” He added that “Team India” is not limited to the government sitting in Delhi but also includes states as equal partners in the growth process and thus putting the idea of cooperative federalism into practice.
The finance minister observed that whereas the national economy has been growing at a below 5 percent rate the states have been doing well. “Union and states must complement each other in managing the economy and the fiscal policy. This is the essence of cooperative federalism. It has been noted that while the growth of the country has crawled at sub 5% in the recent years there have been States registering much robust growth. This is clearly a case of sum being less than its parts and needs to be addressed through our concerted efforts,” he stressed.
Among the outstanding issues, Jaitley referred to the Goods and Services Taxes (GST) on which now consensus needs to be built and implementation done at an early date. “Implementation of GST has the potential to significantly improve the growth story,’’ he added.
The meeting was attended by Nirmala Sitharaman, the Minister of State for Finance, by six chief ministers, holding finance portfolio, 18 ministers representing states, including Lt. Governor of Delhi Najeeb Jung, Chief Minister of Rajasthan Vasundhra Raje, Chief Minister of Goa Manohar Parrikar, Chief Minister of Sikkim Pawan Chamling, Chief Minister of Nagaland T.R. Zeliang, and Chief Minister of Manipur Okram Ibobi Singh among others.
At the meeting the state governments suggested the need for higher investment in infrastructure, boosting of industrial growth and need for job creation. Rationalisation of taxes and duty were also sought by some States.
Union territories also suggested that they may be made a part of Finance Commission award.
The states also expressed concern regarding the likely impact of the VII Central Pay Commission award on their finances. It was suggested that consultative process for implementation of VII CPC award must also include the States.
The finance minister is scheduled to meet economists and representatives of banking and financial institutions on Tuesday.