In the pre-budget 2018 meeting, the finance minister Arun Jaitley discussed with state government about the current situation. The state government from Congress-led government and regional parties mentioned the revenue drop and agriculture suffering from GST implementation.
Sushil Modi, Bihar CM informed that Bihar state demands more support from the centre to implement key schemes and asks for revised wages for MGNREGA workers. He also advised increasing the exemption under income tax up to Rs. 3 lakh instead of Rs. 2.5 lakh currently.
Manpreet Singh Badal, Punjab FM asked the government to implement a farm debt waiver in the country like the one declared by the Congress in Punjab state.
Thomas Isaac, Kerala finance minister mentioned that GST implementation created a drop in revenue collection and resource which further impacted the states’ socio-economic spending ability. He further said that from 2015 to 2017, the diesel prices increased up to Rs. 8 per litre and it is reduced to only Rs. 2 per litre, which is not fair.
None of the states increased the tax rate levied on diesel. He further said that it was unfair that the centre asks the states to bring down the tax rate when almost all states were suffering from the financial crisis due to irregular revenue collection after GST roll out. He wants the centre to implement the anti-profiteering regulations tightly. The addition of any taxes like stamp duty in states under GST regime will be unconstitutional.
Jai Ram Thakur, Himachal Pradesh CM also demanded that for industries, 100% tax relief should be given in the starting 5 years of GST implementation and further 50% tax exemption should be given for the subsequent five years. He also advised a 7% interest subsidy to hilly states for seven years in order to serve industrial development objective, an increase in import duty on Apple, and reduction in the corporate tax rate to 20%.
Manpreet Singh Badal, Punjab finance minister suggested that the centre should share the taxes to states on a monthly basis rather than a quarterly basis in FY18 and also to assist Rashtriya Krishi Vikas Yojana to 90:10. Sushil Modi, Bihar Deputy CM demanded growth in central funds. He said, “continued the reduction in the central share of some important centrally sponsored schemes” including Pradhan Mantri Gram Sadak Yojana, PM Awas Yojana, MGNREGA, National Social Assistance Programme, and Sarva Shiksha Abhiyan. He said it requires “a need to revise the wages for the unskilled labourers working under MGNREGA on part of Government of India.” He also wants Punjab to be included in the list of the “special package of Rs 1.65 trillion” declared by the PM Modi.
