Mamata Banerjee is right in demanding more power for states: Arun Maira

KOLKATA: Ahead of the Lok Sabha election scheduled next year, Planning Commission member Arun Maira has fanned up the debate over the distribution of taxes between the centre and state government taxes by supporting a demand from non-Congress chief ministers.

West Bengal chief minister Mamata Banerjee has been the frontrunner in demanding the power to collect central taxes and using the amount to finance the state's development projects. Others like Punjab, Haryana and Tripura are demanding a higher share of central taxes.

"Mamata Banerjee is right in demanding more power for states," Maira said on Wednesday in Kolkata. "It can't be top down approach any more where the centre dictate terms."
Of the total taxes collected by the central government, just about 32% is being distributed among states. West Bengal receives 2.5% of it.

"The money does not come from anyone's pocket. The funds which the centre allocates to the state governments are collected as taxes from the states," she had been saying after failing to get a three-year moratorium on the state's over Rs 2 lakh crore debt burden.

It is widely anticipated that no single party would get a majority in the next Parliamentary election and therefore a collation government would be imminent with the support of regional party chiefs. Mamata Banerjee of Trinamool Congress in West Bengal, Jayalalithaa of AIDMK in Tamil Nadu, Nitish Kumar of JD(U) in Bihar are expected to play major roles in the formation of the next Union government.

Maira said that the role of the Planning Commission needs to evolve to capture the changing dynamics of the centre-state relationship under a coalition structure of the central government and since the regional parties become more powerful like never before.

"Planning Commission's process of working with states is outdated," Maira said at a seminar organised by ICRIER, FICCI and Germany's political foundation KAS on India's regulatory framework and the 12th Five Year Plan.

At present, Planning Commission finalises the share of central taxes and allocation of the fund for state's development projects in consultation with the respective government.

Maira has argued that Planning Commission must become a system reform commission rather than what it is now. He said the Commission has already started a consultative approach with more stakeholders to capture the evolving situation where citizens are much better informed and also keen to get involved in the process. Over 950 civil society organisations across the country have provided inputs for preparing the approach paper for 12th Five Year Plan. All state governments as well as local representative institutions and unions, had been consulted too.