Seeking a change in the structure of the Goods and Services Tax (GST) council, the Opposition on Tuesday sought revival of the Empowered Committee of State Finance Ministers, which was the key decision-making body during the previous Value Added Tax regime. Taking a dig at the Narendra Modi-led government, Maharashtra’s former finance minister and Nationalist Congress Party leader Jayant Patil alleged that the GST council had been deciding on tax proposals with political gains for the ruling party in the mind. The GST council is chaired by Union Finance Minister Arun Jaitley, while finance ministers of various states are council members. The Empowered Committee, on the other hand, was headed by a Finance Minister of one state, and only had a Union government representative as a nominated members.
“We are seeing some political decisions being taken while clearing tax proposals. Even the timing of such decisions is based on timing of elections without giving due consideration to the implications it would have on other states. We have demanded that a VAT empowered committee-like structure be revived so that tax proposals can be decided without any political bias,” said Patil, who now heads the NCP in Maharashtra. Patil raised the demand during consultations with the 15th Finance Commission, which is on a visit to Mumbai and held consultations with representatives of various political parties, and trade union leaders on Tuesday. The consultations with the elected representatives come a day before the Maharashtra government will formally submit it’s memorandum of demands to the Commission on Wednesday.
With Maharashtra being one of the top performing states as far as fiscal measures are concerned, the participating political representatives from the states, cutting across party lines, on Tuesday demanded a revision of the mechanism of allocation of funds from the divisible pool to the state. Both the ruling and the Opposition side in Maharashtra wanted the present weighted parameters to be changed to ensure that the “performing states” are not “penalised.” Congress’s Ratnakar Mahajan demanded that the weightage given to geographical area in the present set up must be reduced. Jayant Patil, meanwhile, sought allocation of more funds to regions, where people migrate or go to, which would ensure more funds to states such as Maharashtra. Toeing the state government’s demand, politicians across party lines raised the demand for special grants to improve the infrastructure of the financial capital.
On Wednesday, the Maharashtra government is expected to demand allocation of Rs 50,000 crore during the Fifteenth Finance Commission’s period for Mumbai. Shiv Sena’s Arvind Sawant, meanwhile, stressed on the regional disparities existing in Maharashtra. “The commission should also take into account the district net per capita income while allocating funds,” he said. BJP’s Atul Bhatkalkar raised the demand for special grants for development works in the Vidharbha and Marathwada belt, while Communist Party of India (Marxist) leader Ajit Abhayankar demanded additional grants for measure to alleviate farm distress in the state. Bhatkalkar, meanwhile, said he had raised a “strong objection” to the Finance Commission’s observations earlier about the fiscal health of the state. While lauding Maharashtra’s efforts towards fiscal management, the Commission had earlier observed that the rising revenue deficit to the Gross State Domestic Product was a worrying signal.