Patnaik for more Central funds for less developed states

New Delhi, Dec 9 (UNI) Orissa Chief Minister Naveen Patnaik today called for increased flow of Central assistance to less developed states to reduce growing disparities by way of region-specific interventions in states lagging behind.

Outlining a three-pronged strategy, he said the central assistance provided should be of a non-debt creating nature; such states should be allowed to mobilise higher resources on their own through levy of VAT on services; and by allowing swap of high cost central debt.

''Less developed states like Orissa which witness acute regional social and gender disparities, have to register even a higher growth rate than the projected rate for the economy as a whole,'' Mr Patnaik said in his address at the National Development Council (NDC) meeting, presided over by Prime Minister Manmohan Singh.

Concurring on the need for a more focused public investment strategy for less developed states like Orissa, he suggested that the Eleventh Plan strategy should look at ways in which the farmers could get remunerative prices.

Stating that the state had undertaken several reform measures to increase marketing linkages for farm produce, but since availability of credit was critical, he urged quick action on re-capitalisation of cooperatives as 70 per cent of farm credit was extended by primary cooperative credit societies in Orissa.

Informing that the state had already put in place the public-private partnership (PPP) mechanism for port and road developmment, he said poor states like Orissa needed greater investments in the non-PPP mode.

The Chief Minister demanded that the Centre grant special industrial incentive package for the depressed Koraput-Bolangir- Kalahandi region which had no industrial base, on a par with the Northeast states, Uttaranchal and Himachal Pradesh.

On the impact of the National Mineral Policy on his mineral rich state, he welcomed it saying his government had been encouraging value addition in the mineral sector though exports on minerals such as iron ore and chromite should be banned.

He noted that several of the recommendations of the high-level committee aimed at constraining the powers of state governments to benefit from their natural resources. ''On the one hand, the Centre is encouraging decentralisation of planning and development process and on the other, it is increasing its control over local resources and further centralising decision making in this regard.'' ''Likewise, the power producing states like Orissa are being discriminated compared to the pwer consuming states in matters of revenue sharing,'' he said, adding that the cream was being derived by consuming states while the producing states bore the brunt of pollution and displacement of persons without any compensation.

''To correct this unfair system, the power producing states should be adequately compensated for environmental degradation and displacement of people.'' He suggested that a central legislation should be passed providing for levy on duty on generation of power by the Central Government which can be passed on to the concerned state government and allocation of an appropriate portion of power generated to the host state at variable cost.

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