SAD Appeals for Tax Devolution Formula Change to 16th Finance Commission

Chandigarh, Jul 22 (PTI) The Shiromani Akali Dal (SAD) on Monday appealed to the 16th Finance Commission to modify the formula adopted for devolution of taxes to the states.

The opposition party also sought allocation of funds to facilitate crop diversification, instituting a debt waiver for state farmers, fixing a regular grant for compensating border farmers, tax concessions for promoting industry and release of dues of rural development fund (RDF).

The 16th Finance Commission (FC), led by its Chairman Arvind Panagariya, is visiting Punjab -- the third state after having gone to Himachal Pradesh and Chhattisgarh.

The mandate of the commission, which is formed every five years, is to make recommendations for the proportion of distribution of central taxes between the Centre and states.

Senior SAD leaders Maheshinder Singh Grewal and Dr Daljit Singh Cheema participated in the 16th Finance Commission meeting.

Cheema said public debt in Punjab had reached an alarming figure of Rs 3.43 lakh crore and that a debt-to-GSDP (gross state domestic product) ratio of 49 per cent left negligible funds for capital expenditure.

The SAD delegation called for reworking formulas for devolution of taxes to states. It said vertical devolution of taxes should be increased from 41 per cent to 50 per cent.

It also highlighted how the state had to spend more on internal security due to cross-border smuggling of arms and drugs as well as the fact that it had the highest population of scheduled castes in the country.

Both Grewal and Cheema highlighted the need for a major diversification plan to save ground water depletion and appealed for special grants to improve water carrying capacity of its canals.

Meanwhile, a Punjab government statement said political parties presented a united front before the Finance Commission, highlighting the state's pressing concerns and seeking special grants and schemes.

The parties urged the commission to incorporate recommendations for Punjab's benefit in its report to the Union government, focusing on economic development and growth, crop diversification, sustainability and farmers' welfare, industrial development, and infrastructure development, besides special grants for social welfare and education, and healthcare and medical infrastructure development.

The parties emphasised Punjab's significant contributions to the nation's food security, and cultural heritage, stressing the need for reciprocal support from the Centre.

By presenting a united front, Punjab's political parties demonstrated their commitment to the state's well-being, setting aside ideological differences for the greater good, the official statement said.

Representatives of other political parties of Punjab who participated in the meeting included Congress leaders Vijay Inder Singla, former MLA Kuldeep Singh Vaid and Hardeep Singh Kingra, BJP's Jagmohan Singh Raju and Harjeet Singh Grewal, and BSP State President Jasbir Singh Garhi and party MLA Nachhatar Pal.