Finance Commissions failed to bridge inter-state disparities: CM

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Thiruvananthapuram, May 6 (UNI) Kerala Chief Minister V S Achuthanandan today said Finance Commissions failed in reducing inter-state disparities and the gap had only widened over the years.

Inaugurating a national seminar on 'Centre-State Relations in the Context of 13th Finance Commission' here, he said the Finance Commissions had also failed in making the states fiscally independent.

''The states are increasingly becoming dependent on the Centre despite the claims of the Finance Commissions that they have attempted to make the states fiscally more independent,'' he said.

Pointing out that the fiscal dependency of the states on the Centre had become more acute in the post-liberalisation period, Mr Achutanandan said in the past the vertical imbalances were taken care of by the commission through progressive fiscal transfers.

In the phase of increasing fiscal strain in the post-liberalisation period, the states were forced to spend for themselves and it was doubtful whether the Finance Commission would be able to address the vertical imbalance.

Delivering the keynote address, West Bengal Finance Minister Asim Dasgupta said the states should be given more powers on concurrently taxing all services.

He also pointed out the states share in the total market borrowing of the Centre and States should be raised to 50 per cent.


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