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:: Press Releases ::
Monday, February 24, 2014

1. Dr. Y.V. Reddy, Chairman, Ms. Sushama Nath, Prof. Abhijit Sen, Dr. M. Govinda Rao and Dr. Sudipto Mundle, Members of the Fourteenth Finance Commission and Sh. A.N. Jha, Secretary visited the State of Rajasthan on February 24, 2014 to hold consultations with the State Government and key stake holders.

2. The Commission met with the Hon’ble Chief Minister, her Cabinet Colleagues and senior officers of the State Government, for discussions.

3. The Chief Minister welcomed the Chairman and Members to Rajasthan and highlighted the priority areas of the State such as Irrigation projects for reinfed agriculture, the need to reduce intra district disparity and the States’ focus on increasing employment through enhanced investments. She emphasised that increasing centralisation had weakened States and therefore the need for fairer and more equitable distribution of central resources and correcting the distortions in fiscal federal architecture. She urged the Finance Commission to take a holistic view of expenditure requirement of the States including the plan requirement. A recommendation was also made for setting up a Federal Council to oversee and enforce implementation of Finance Commission awards.

4. The State Government submitted its Memorandum and made a detailed presentation on the finances of the State Government, its projection for the award period and gave its views on the Terms of Reference of the Commission. The State suggested that vertical devolution should be enhanced to 50% of the divisible pool of the central taxes. On horizontal distribution, it was suggested that population basis be 1971 with a weight of 25% on the basis of composite index of six factors, fiscal capacity distance 40%, fiscal discipline 10% and area 25% weighted by the inverse of the density of the population. Besides this, the State also recommended allocation of 5% of the divisible pool for local bodies. Proposals relating to State Specific Grants mainly in drinking water, health and solar projects amounting to Rs. 26,562 Crore were highlighted in the States’ Memorandum. During the meeting an additional grant of Rs.17,927 Crore was sought for the road and buildings sector.

5. The Commission also interacted with representatives of political parties, Panchayati Raj Institutions, Urban local bodies and Trade and Industry Associations.

6. The Commission places on record its appreciation to the Chief Minister and State Government for the cooperation and support extended to the Commission and assures that the issues raised have been taken on board and will receive due attention in the deliberations of the Commission. The Commission also looks forward to its continuing interaction with the State Government.

7. The Commission will finalize its recommendations by October 2014 after completing its discussions with all the State Governments, the Government of India and relevant stake holders.

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