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Finance panel okays Rs 57,832 cr for State

By Kalyan Barooah

NEW DELHI, March 1 � In what could bring cheers to the Tarun Gogoi Government, Assam has been given a handsome hike by the 13th Finance Commission, recommending transfer of Rs 57, 832.70 crore during the 2010-2015 period.

The 13th Finance Commission�s award subjected fulfilment of several conditions and is likely to boost the State finances and may come as a boon for the Gogoi Government ahead of the Assembly polls scheduled next year. Assam has been given a total grants-in-aid totalling Rs 5,512.10 crore.

The 13th Finance Commission�s report tabled in the Parliament and accepted by the Union Cabinet, is expected to have significant impact on the State�s finances at a time when the Assam Government is struggling to make both ends meet after hiking the salaries and wages of the government employees, bringing it at par with Central government employees.

According to the 13th Finance Commission�s recommendation, Assam�s share in Central taxes and duties has been worked out at a whopping Rs 52,620.60 crore. This marks a quantum jump over the 12th Finance Commission�s award of Rs19,850.69, as the State�s share of the Central taxes and duties. Besides, Assam would also be entitled to Rs 300 crore-performance incentive.

As reported earlier in this newspaper, Assam along with the Special Category States of Sikkim and Uttarkhand has already been recommended for special incentive grant of Rs 300 crore each because it graduated out of the non-Plan revenue deficit.

The grant in-aid for several vital projects, including protection, preservation and promotion of Majuli island is a meagre Rs 5 crore. The State Government projected a requirement of Rs 971.13 crore.

The Finance Commission granted Rs 25 crore for police training to strengthen the armed police wing and for construction of a police academy and setting up of a counter insurgency and jungle warfare school.

For the local bodies, Rs 1,892.8 crore has been awarded, for disaster relief and capacity building, considered vital for a flood prone State, a sum of Rs 1,336.8 crore has been earmarked.

The State�s share of the Disaster Relief Fund (2010-2015) has been projected at Rs 145.75 crore, taking the corpus of the fund to Rs 1,457.51 crore.

For elementary education, transfer of Rs 238 crore has been recommended. Environment related grant for forest and water sector management Rs 184.60 crore and Rs 88 crore respectively have been recommended. For maintenance of roads and bridges Rs 336 crore has been suggested.

The Commission has recommended Rs 600 crore as grants-in-aid for State-specific need of Assam. The amount would be given in tranches of Rs 150 crore spread over financial years starting 2011-2012.

Projecting a non-Plan revenue deficit (2010 to 2015), the Assam Government had sought an award of Rs. 99,870 crore from the Finance Commission. It had further sought grants of Rs. 22,758 crore to implement the Shukla Commission recommendation, a special package for Insurgency Damage Neutralisation, besides a grant of at least Rs.25, 000 crore over a period of five years.

In addition, the Assam Government had sought Rs 20,496 crore additional grants for upgradation, modernisation and special problems of the State besides a hike in grants for Sixth Scheduled Areas and rehabilitation of erosion affected people.

As for monitoring of the funds, the 13th Finance Commission has endorsed the recommendation of the 12th Commission. It had recommended that a high level monitoring committee headed by the State Chief Secretary should review utilisation of grants on a quarterly basis and take corrective action as required to ensure proper utilisation of these funds.

According to the Finance Commission�s report, Assam�s share of taxes has been worked out at 3.68 per cent. The average devolution as percentage of Gross Social Domestic Product for Assam is 7.79 per cent marking an increase of 2.63 per cent over the 12th Finance Commission�s award of 5.16 per cent.

A team of 13th Finance Commission led by chairman Dr Vijay L Kelkar and members BK Chaturvedi, Dr Indira Rajaraman, Prof. Atul Sarma and Dr Sanjiv Misra, visited Assam in December 2008 as part of consultations with the State Government and key stakeholders.

In his presentation before the Finance Commission, Chief Minister Tarun Gogoi while highlighting the various problems of the State, underlined that after independence economic fortune of the State declined and the gap between per capita income of Assam and the rest of the country has widened. The State required a GSDP growth rate of 8.5 to 9 in future to close this gap.

He highlighted that there were signs of fiscal instability owing to the ramifications of the Sixth Central Pay Commission, steep fall in international crude oil prices causing oil royalty revenue to fall by more than Rs. 1000 crore per annum.

The Chief Minister called for concurrent powers to tax all services. This should also be incorporated in the legislative framework of the proposed Goods and Services Tax (GST). Instead of �net proceeds�, �gross proceeds� should be brought under shareable Central taxes by way of an appropriate Constitution Amendment.

Inherent factors like disadvantageous geographical location, climatic condition, difficult terrains and unique ethnic and political problems of Special Category States should be taken into account for inter se distribution of the proceeds. Further, the Finance Commission should also earmark 33 or more of the aggregate share of the States in shareable taxes to the Special Category States, the Chief Minister emphasised.

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Finance panel okays Rs 57,832 cr for State

NEW DELHI, March 1 � In what could bring cheers to the Tarun Gogoi Government, Assam has been given a handsome hike by the 13th Finance Commission, recommending transfer of Rs 57, 832.70 crore during the 2010-2015 period.

The 13th Finance Commission�s award subjected fulfilment of several conditions and is likely to boost the State finances and may come as a boon for the Gogoi Government ahead of the Assembly polls scheduled next year. Assam has been given a total grants-in-aid totalling Rs 5,512.10 crore.

The 13th Finance Commission�s report tabled in the Parliament and accepted by the Union Cabinet, is expected to have significant impact on the State�s finances at a time when the Assam Government is struggling to make both ends meet after hiking the salaries and wages of the government employees, bringing it at par with Central government employees.

According to the 13th Finance Commission�s recommendation, Assam�s share in Central taxes and duties has been worked out at a whopping Rs 52,620.60 crore. This marks a quantum jump over the 12th Finance Commission�s award of Rs19,850.69, as the State�s share of the Central taxes and duties. Besides, Assam would also be entitled to Rs 300 crore-performance incentive.

As reported earlier in this newspaper, Assam along with the Special Category States of Sikkim and Uttarkhand has already been recommended for special incentive grant of Rs 300 crore each because it graduated out of the non-Plan revenue deficit.

The grant in-aid for several vital projects, including protection, preservation and promotion of Majuli island is a meagre Rs 5 crore. The State Government projected a requirement of Rs 971.13 crore.

The Finance Commission granted Rs 25 crore for police training to strengthen the armed police wing and for construction of a police academy and setting up of a counter insurgency and jungle warfare school.

For the local bodies, Rs 1,892.8 crore has been awarded, for disaster relief and capacity building, considered vital for a flood prone State, a sum of Rs 1,336.8 crore has been earmarked.

The State�s share of the Disaster Relief Fund (2010-2015) has been projected at Rs 145.75 crore, taking the corpus of the fund to Rs 1,457.51 crore.

For elementary education, transfer of Rs 238 crore has been recommended. Environment related grant for forest and water sector management Rs 184.60 crore and Rs 88 crore respectively have been recommended. For maintenance of roads and bridges Rs 336 crore has been suggested.

The Commission has recommended Rs 600 crore as grants-in-aid for State-specific need of Assam. The amount would be given in tranches of Rs 150 crore spread over financial years starting 2011-2012.

Projecting a non-Plan revenue deficit (2010 to 2015), the Assam Government had sought an award of Rs. 99,870 crore from the Finance Commission. It had further sought grants of Rs. 22,758 crore to implement the Shukla Commission recommendation, a special package for Insurgency Damage Neutralisation, besides a grant of at least Rs.25, 000 crore over a period of five years.

In addition, the Assam Government had sought Rs 20,496 crore additional grants for upgradation, modernisation and special problems of the State besides a hike in grants for Sixth Scheduled Areas and rehabilitation of erosion affected people.

As for monitoring of the funds, the 13th Finance Commission has endorsed the recommendation of the 12th Commission. It had recommended that a high level monitoring committee headed by the State Chief Secretary should review utilisation of grants on a quarterly basis and take corrective action as required to ensure proper utilisation of these funds.

According to the Finance Commission�s report, Assam�s share of taxes has been worked out at 3.68 per cent. The average devolution as percentage of Gross Social Domestic Product for Assam is 7.79 per cent marking an increase of 2.63 per cent over the 12th Finance Commission�s award of 5.16 per cent.

A team of 13th Finance Commission led by chairman Dr Vijay L Kelkar and members BK Chaturvedi, Dr Indira Rajaraman, Prof. Atul Sarma and Dr Sanjiv Misra, visited Assam in December 2008 as part of consultations with the State Government and key stakeholders.

In his presentation before the Finance Commission, Chief Minister Tarun Gogoi while highlighting the various problems of the State, underlined that after independence economic fortune of the State declined and the gap between per capita income of Assam and the rest of the country has widened. The State required a GSDP growth rate of 8.5 to 9 in future to close this gap.

He highlighted that there were signs of fiscal instability owing to the ramifications of the Sixth Central Pay Commission, steep fall in international crude oil prices causing oil royalty revenue to fall by more than Rs. 1000 crore per annum.

The Chief Minister called for concurrent powers to tax all services. This should also be incorporated in the legislative framework of the proposed Goods and Services Tax (GST). Instead of �net proceeds�, �gross proceeds� should be brought under shareable Central taxes by way of an appropriate Constitution Amendment.

Inherent factors like disadvantageous geographical location, climatic condition, difficult terrains and unique ethnic and political problems of Special Category States should be taken into account for inter se distribution of the proceeds. Further, the Finance Commission should also earmark 33 or more of the aggregate share of the States in shareable taxes to the Special Category States, the Chief Minister emphasised.