Seeking to build bridges with states, Finance Minister Pranab Mukherjee today said he would look into their demand for Central Sales Tax (CST) compensation and deal with the problem of debt-ridden states of Kerala, Punjab and West Bengal.
Seeking to build bridges with states, Finance Minister Pranab Mukherjee today said he would look into their demand for Central Sales Tax (CST) compensation and deal with the problem of debt-ridden states of Kerala, Punjab and West Bengal.
"Our effort is to build health relationship with states," he said replying to a debate on the Budget in the Rajya Sabha.
On the issue of compensation against revenue loss to states on account of reduction of Central Sales Tax (CST), Mukherjee said he had received a letter from the chairman of the Empowered Committee of state Finance Ministers and has an open mind on the issue.
"I have not closed the issue...I will look into it," he said in response to the demand of the states to continue with the compensation or hike the CST rate to original 4 per cent, which was slashed to 2 per cent to pave way for implementation of the Goods and Service Tax (GST).
The Constitution Amendment Bill on GST is being scrutinised by the Standing Committee on Finance.
Referring to the problem of three debt-stressed states of Kerala, Punjab and West Bengal, Mukherjee said a committee was appointed to look into the issue and appropriate decisions would be taken by the 14th Finance Commission.
He further said that out of the Rs 41,000 crore that he had proposed to raise through tax proposals in the budget for 2012-13, 32 per cent would go to states.
Most of the states are revenue surplus, the Minister said, adding he was looking into the problems the debt-ridden states which are few. Referring to the issue of rising tax arrears, Mukherjee said two individuals late stock exchange broker Harshad Mehta and Pune-based stud farm owner Hassan Ali account for 60 per cent of these.
"We are raising revenue (demand) but we are not realising...no visible assets are available," the Finance Minister said adding the cases related to their tax liabilities have been in courts for long. Not even a single rupee has been recovered," he lamented.
Seeking to build bridges with states, the minister said he would look into their demand for Central Sales Tax (CST) compensation and also deal with the problem of debt-ridden states of Kerala, Punjab and West Bengal.
“Our effort is to build health relationship with states,” he said. On the issue of compensation against revenue loss to states on account of reduction of Central Sales Tax (CST), Mukherjee said he had received a letter from the chairman of the Empowered Committee of state Finance Ministers and has an open mind on the issue.
While most of the states are revenue surplus, the Minister said, the Centre was looking into the problems of the debt-ridden states which are few.
On global situation, he said, "...we do not live in isolation. The action, reaction and development outside world have influences overall. The euro zone crisis I refer, it is not for academic discussion." Mukherjee also expressed concern on the FII outflows from the country.
The Minister also said he would explore possibility of setting up a committee of Chief Ministers of the eastern states to give further impetus to achieving second green revolution in the region.
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