PM calls for removal of inter-state trade barriers

Chandigarh, Sep 28 (UNI) Prime Minister Manmohan Singh today called for removal of barriers to inter-state trade and adoption of policies which strengthen the human and physical resource capabilities of states.

''You need to establish cooperative mechanism so that inter-state barriers of all forms can get reduced; so that movement of people and goods is easy; so that the available resources of the region in water and power are best utilised,'' he said while addressing Chief Ministers' Conclave organised by the PHDCCI here.

The Chief Ministers of Delhi, Punjab, Haryana, Jammu and Kashmir and Himachal Pradesh besides the Administrator of Chandigarh Union Territory participated in the conclave. Representatives of Rajasthan and Uttar Pradesh also took part.

Dr Singh called upon them to establish a forum for sharing inter-state experiences in development and ''think big and think together'' as the prosperty of people of this region was of utmost importance.

He said the Constitution conceived of India as a unified, common market. ''However, over the years we managed to fragment the national common market by erecting a large number of financial and physical barriers which choke inter-state commerce''. This is done under the mistaken belief that 'beggar-thy-neighbour' policies would promote the welfare of one's own residents.'' He said tax systems have been put in place which act as hindrances to sales to other states. Tax breaks and shelters have been created to facilitate development of backward regions. Physical controls through permits and check-popints increase transaction costs for commerce.

The Prime Minister said when the whole world is moving towards dismantling barriers to trade and promoting trade facilitation, it is imperative that states, too, realise that these policies_ which may be driven by revenue or developmental concerns_ will not pay off in the long run. ''What will pay off are policies which strength the human and physical resource capabilities of states,'' he added.

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