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S. No.
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State(s)
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Suggestions
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1.
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Andhra Pradesh
Kerala
Maharashtra
Tamil Nadu
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Methodology: Terms of
Reference should lay down broad principles and
should be evolved through consultations with
the state governments under aegis of Inter-State
Council/National Development council (vide recommendations
of the National commission on Review of the
Working of the Constitution). Consultation regarding
composition of Commission too.
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2.
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Assam
Madhya Pradesh
Orissa
Rajasthan
Tripura
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Plan & Non-Plan Revenue:
Total revenue gap (Plan & Non-Plan)
should be assessed by the Finance Commission
and covered by devolution and grant. [EFC was
asked but did not do]. May be termed as Developmental
and Regulatory expenditure. Plan non-Plan dilemma:
Planning exercise leads to more borrowings,
which increase fiscal deficit.
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3.
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Bihar
Haryana
Jammu & Kashmir
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
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Population: Population
figures according to 1991/2001 Census (and not
1971 Census) should be used in all cases where
population is regarded as a factor for determination
of central devolution.
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4.
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Bihar
Tripura
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Terrorism: Special grants
for meeting expenditure on combating terrorism
and development of border areas. Security
related expenditure to be reimbursed to the
fullest extent.
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5.
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Jharkhand
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Naxalism: special central
assistance for modernization and strengthening
of the police force to combat Naxalism.
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6.
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Arunachal Pradesh
Assam
Bihar
Chhattisgarh
Gujarat
Haryana
Orissa
Punjab
Rajasthan
Tamil Nadu
Tripura
West Bengal
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Debt Relief: Assessment
of debt position of States as on 31.3.2005 and
suggest corrective measures. Rescheduling of
debts. Formulate a general scheme of debt relief.
Writing off of old debts. Reducing interest
rates on outstanding loans in the context of
declining interest rates. Debt burden due to
natural calamities. Examination of debt position
of newly created states. One time grant for
special category states to clear at least the
principal amount.
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7.
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Bihar
Gujarat
Haryana
Orissa
West Bengal
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Natural Calamities: Assessment
of impact of natural calamities on the states'
economy and resources. Review of Calamity Relief
Fund. Compensation for loss of tax and non-tax
revenues due to natural calamities.
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8.
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Haryana
Uttar Pradesh
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Synchronization of F.C.
with State FCs, and FYP period.
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9.
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Himachal Pradesh
Madhya Pradesh
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Environmental Protection:
Compensation for environmental protection
measures and resultant sacrificing of economic
activity. Extent of forest cover in the State
to be made a criteria for devolution.
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10.
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Jammu & Kashmir
Jharkhand
Karnataka
Madhya Pradesh
West Bengal
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Local Bodies: assess
deficit of local bodies and provide adequate
grant for construction of Panchayat ghars. Incentive
to states for release of grants to local bodies.
Functioning of local bodies should be one of
the parameters in the horizontal distribution
of resources. Demands on State Governments on
account of recommendations of State Finance
Commission.
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11.
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Haryana
Jammu & Kashmir
Karnataka
Manipur
Meghalaya
Mizoram
Orissa
Sikkim
Tripura
Uttar Pradesh
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Fiscal Reforms Facility:
The size of the incentive fund should be
fixed as a percentage of the total devolution
of funds to the state. Twelfth FC should ensure
equitable distribution of incentive funds, which
should be meaningful enough to encourage State
Governments. Restrict the scope and ambit of
MTFRP as achieving 5% improvement in revenue
surplus every year is highly impracticable and
unfair. May be scrapped as withholding of grant
has caused financial difficulties. It is contrary
to the spirit of the Article 275, which does
not envisage any conditionality. Tax devolution
and grants-in-aid should not be used as a means
of imposing fiscal reforms on the States; a
separate fund, outside the purview of the Finance
Commission, may be created for the purpose.
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12.
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Kerala
Madhya Pradesh
Jharkhand
West Bengal
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VAT/MAT: Mechanism to
compensate revenue losses on account of replacement
of sales tax by VAT. Distribution of revenue
to be made in such a way that States are not
put to loss due to MAT.
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13.
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Arunachal Pradesh
Jharkhand
Madhya Pradesh
Tripura
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Infrastructure: Address
needs of states with less than national average
stock of infrastructure. Remedial Measures for
imbalance in infrastructure development to attract
private investment.
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14.
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Orissa
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Gross Receipts: Transfers
on the basis of gross receipts of Central Taxes
rather than net proceeds (Constitutional amendment).
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15.
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Orissa
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Revenue Gap: Reducing
gap between per-capita non-plan revenue surplus
of the state and average per-capita revenue
surplus of all States taken together. Hence
criteria like infrastructure, low per-capita
income, poverty ratio, etc. should be given
predominant consideration.
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16.
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Meghalaya
Orissa
Tripura
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Monitoring release of Share:
Actual release of share in Central taxes is
less than recommended by FCs. Ensure that the
amounts recommended for devolution are actually
devolved. TwFC to indicate minimum amount as
a mechanism to compensate for such losses. Non-Plan
Gap Grant should be increased by the quantum
of shortfall in State's share of Central taxes.
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17.
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Orissa
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Sinking Fund & Guarantee
Redemption Fund: Incentive scheme to consolidate
and strengthen the Sinking Fund and Guarantee
Redemption Fund (RBI).
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18.
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Orissa
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Earlier Commissions:
Review recommendations of earlier commissions
to compensate for palpable injustices.
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19.
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Karnataka
Madhya Pradesh
Orissa
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Market Borrowings: Flexibility
to raise borrowings within the overall ceiling.
Rational system for allocation of market borrowing.
Mechanism to provide greater access to market
borrowing to fiscally disadvantaged states.
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20,
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Goa
Haryana
Rajasthan
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Fiscal Prudence: Earmark
some percentage of divisible pool for observing
fiscal prudence, raising revenues and balancing
the budgets. Formula to compensate financially
disadvantaged states and penalize financially
imprudent states. Incentive-disincentive mechanism
based on fiscal and financial performance.
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21.
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Kerala
Mizoram
Rajasthan
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Normative Criteria / Realistic
Assessment: Adopt a normative approach and
objective criteria in the assessment of revenue
gap rather than base it on analysis of historical
data. Quantum of gap grant to be based on realistic
assessment of the resources, infrastructure
and financial condition of the State rather
than normative approach. Determination of discretionary
grants to be need-based and not hypothetical.
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22.
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Rajasthan
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Floor limit for User charges:
Examine the subsidy regimes of States and evolve
a floor limit for user charges to be levied
for various services.
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23.
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Tamil Nadu
Manipur
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Demand on States' Resources:
Take into account the resources of the States
and demands thereon due to social services,
policing, debt servicing etc.
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24.
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Tamil Nadu
Manipur
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Downsizing/Unemployment:
Assess levels of incremental funding for skill
redevelopment in the context of right-sizing
/ downsizing / unemployment and take into account
for purposes of devolution. Attractive incentives
for downsizing.
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25.
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Himachal
Manipur
Meghalaya
Tripura
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Special Category States:
At least 30% of the vertical devolution to be
allocated among the Special category States
on the analogy of the Central Plan Assistance.
Restore the share of the Special category States
to at least the level provided by the TFC. Earlier
principle of award for meeting committed liabilities
of all special category state to be restored.
Landlocked nature and limitation of rail and
air links also taken as indicators of backwardness.
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26
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Uttar Pradesh
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Non-Plan Capital Gap:
Assess 'non-plan capital gap' and suggest relief
measures.
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27.
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Assam
Bihar
Manipur
Meghalaya
Mizoram
Orissa
West Bengal
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Fifth Pay Commission:
Off-set financial burden on state on account
of direct and indirect effect of the recommendations
of the Fifth Pay Commission. Implementation
of the Pay Commission report. Subsequent to
the award of the EFC may be taken into account.
In the context of the adverse impact of the
recommendations of the Fifth Pay Commission,
have a national wage policy. Suggest mechanism
under which Central Government cannot announce
revision of pay and allowances without consulting
the States.
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28
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Bihar
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Fundamental Right to Primary
Education: In the context of primary education
having been made a fundamental right, make recommendations
to meet the additional requirements of funds
for its implementation.
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29.
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Chhattisgarh
Uttaranchal
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New States: Specific
assessment of financial position with reference
to special problems and make recommendations
for grant-in-aid for building up physical and
administrative structure. This should cover
the remaining period of the EFC too.
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30.
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Madhya Pradesh
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Reorganized States: Special allocation
for reorganized states.
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31.
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West Bengal
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Fiscal Imbalance: Reordering
of Centre-State relations in order to rectify
the persisting fiscal imbalance. Desirability
of increasing the level of tax sharing to 50%.
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S. No.
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State
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Suggestion
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1.
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Assam
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(1) Suitable step up in the
allocation to States in absolute terms by increasing
the share of the States in Central revenues,
broadening the tax base, raising additional
taxes and duties under Articles 268 and 269.
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2.
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Bihar
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(2) Increase the share of the
States in Central taxes & duties.
(3) Special grant for backward
States.
(4) Grant for creation of training
and education infrastructure in newly reorganised
States.
(5) Grants to local bodies
based on population and local needs.
(6) Additional grant for implementing
welfare programmes based on the directions of
courts in Public Interest Litigations.
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3.
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Chhatisgarh
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(7) Policies of the Central
Government have been standing in the way of
expansion of the resource base of the States
e.g. revision of royalty of major minerals,
revision of upper limit of Professional Tax,
expansion of the scope of service tax etc.
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4.
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Goa
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(8) Method for channelising
the bank deposits made by NRI from a particular
State for development of infrastructure in that
State.
(9) Setting up of an appropriate
forum for exchange of ideas regarding revenue
mobilisation.
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5.
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Gujarat
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(10) Make recommendations regarding
implementation of the Directives Principles
of State Policy enshrined in the Constitution.
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6.
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Haryana
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(11) Suggest transfer of certain
taxes from the Concurrent List to State List.
(12) Indicate the basis of
its findings and make available state-wise estimates
of receipt and expenditure.
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7.
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Himachal Pradesh
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(13) Implement recommendations
of the Seventh Finance Commission for converting
small savings loans into loans into perpetuity.
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8.
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Jammu & Kashmir
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(14) Take cognisance of States'
power deficit while working out the revenue
gap grant.
(15) Withheld portion of gap
grant to be released in the first month of the
financial year.
(16) SRE needs to be made a
permanent part of assistance.
(17) Grant power to the States
to identify schemes for utilisation of upgradation
grants.
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9.
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Jharkand
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(18) Recommend special grant
for e-governance.
(19) Assistance for: completion
of large and small irrigation projects, new
rail project, development of tourism, mines
and mineral based industries etc.
(20) Computing royalty for
minerals on the basis of value.
(21) Provide guidelines for
guarantees, use of urban land etc.
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10.
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Kerala
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(22) TFC's formula of devolution
based on the weighted average of actual receipts
preferable to EFC's formula.
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11.
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Madhya Pradesh
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(23) Revise mining royalties
as recommended by the EFC.
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12.
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Maharashtra
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(24) Special focus on the problems
of mega metros like Mumbai.
(25) Small savings loan should
not be treated as loans in perpetuity.
(26) Define intra -state Income
Distribution Pattern (IDP) and Below Poverty
Line (BPL) as criteria for devolution and give
due weightage to them.
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13.
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Manipur
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(27) Adopt normative approach
for maintenance expenditure rather than pegging
it to past trends.
(28) Provide for all Plan posts,
which were transferred to non-Plan.
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14.
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Meghalaya
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(29) Benchmark the average
rate of interest at which Central loans are
passed on to the States. Such rates not to exceed
more than 1% above the average cost of borrowing
by the Central Government.
(30) Since minimum consumption
needs like clothing, shelter, fuel etc. are
much higher in hill areas, the nominal per capita
rate should be moderated or deflated by a certain
percentage point factor for hill the States.
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15.
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Mizoram
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(31) Provide separate fund
for transfer of maintenance expenditure of assets
created during the 7th, 8th
and 9th Plan periods into non-Plan.
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16.
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Orissa
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(32) Distribution should be
effected in such a manner as to reduce the gap
between the rich and the poor states.
(33) In case of devolution
to local bodies, provision of matching share
should be left to the ability of the States.
(34) Provision for maintenance
expenditure on upkeep of capital assets created
up to March 2007.
(35) Mechanism for bridging
the in resource raising capacity of economically
weaker States through devolution.
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17.
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Punjab
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(36) Clear cut policy for effecting
improvement in fiscal situation.
(37) Review the unrealistic
grant-loan ratio of Plan assistance for non-special
category States.
(38) No conditionalities for
use of resources transferred to local bodies.
(39) Special need of Punjab
as a border State.
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