Give states half of tax revenues -- Naidu

Give states half of tax revenues -- Naidu
ENS ECONOMIC BUREAU

NEW DELHI, DECEMBER 6: The man who has the second-largest number of members in the BJP-led National Democratic Alliance (NDA), Andhra chief minister Chandrababu Naidu today made it clear that the centre would just have to give a lot more powers to the states. While he has managed to get the centre to give 29 per cent of all tax collections to the states, Naidu said this would have to go up to 50 per cent over a period of time.

The centre must also allow us to borrow directly from the market, Naidu said, instead of the current practice where the central government has to concur with this. Most of the development, the Andhra chief pointed out, has now to be done by the states, and it is only fair that they have the resources to do this. Naidu was speaking at the CII-WEF's session on empowering of state governments.

In turn, the states, Naidu said would have to empower the panchayats, give them more funds, and allow them to come up with imaginative development schemes. The current system of government, Naidusaid was `too big to address small problems and too small to address big ones.'

Naidu said there would be no question of the states squandering this away as the voters would vote out governments which were fiscally irresponsible.

Other participants in the seminar were Kurt Biedenkopf, president of Saxony and Jordi Solei, the president of Catalonia, Spain. Both participants pointed out that the devolution of more funds and powers to the states was a burning issue in their parts of the world as well.

Naidu regretted that despite participating in the last few successive governments at the centre, the Telugu Desam party (TDP) has not been able to convince the central government to devolve more financial powers. ``Only strong states will make a strong centre,'' the TDP leader said adding that revenue raising powers are mostly concentrated in the hands of the centre, while the states are responsible for building social infrastructure, empowerment of local bodies and rural development.

The centre shouldframe broad guidelines under which states can borrow directly from international markets. The states are now required to take prior approval from the centre even for World Bank loans.