Naveen favours states power to levy tax and duties.

Bhubaneswar,Oct 17 (UNI) Orissa Chief Minister Naveen Patnaik today said the fiscal autonomy of the states should not be compromised while implementing the Goods and Service Tax(GST) with effect from April 2010.

The existing powers of the state to levy taxes and duties should be preserved and under no circumstances should the power to levy taxes and duties be curtailed, Mr Patnaik said while addressing a state level seminar on the states' memorandum to the 13th Finance Commission.

The Chief Minister said the term of reference of the 13th Finance Commission to take into account the liabilities of the Centre on account of oil, food and fertilizers bond into fiscal accounting would adversely affect the share of the states.

He said there has been long standing problem of centralisation of resources in the hands of the Centre and gross inadequacy of resources at the disposal of the states in relation to their developmental needs.

The Central government was also raising a large amount of tax revenue through surcharge and cess which largely remained outside the sharable pool, he said adding that the states may now stake their claims on such resources.

The Chief Minister said the empowered committee on the Finance Ministers has recently demanded that 50 per cent of the Central taxes and duties should constitute the shareable pool for distribution among the states which should be debated.

Mr Patnaik demanded that state like Orissa needs special dispensation in the wake of high poverty ratio and high concentration of Scheduled Tribe and Scheduled Caste population and hoped that the 13th Finance Commission would give due weightage to these factors.

He further said that the 13th Finance Commission should be urged to look into the impact of 6th Central Pay Commission revision on the state's resources and suggest suitable compensation from the Centre.

Stating that calamities like flood, cyclone and drought being constant companions of Orissa creating havoc in the lives of the people and adversely affecting the livelihood, the Chief Minister called for larger corpus of calamity relief fund with nominal state contribution and also suitable norms for grants from the NCCF.

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