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Rationalise the devolution: Maharashtra CM

BS Bureau

I commend the Union Government for following the example set by the state in effecting a curtailment of administrative expenditure and labour and energy sector reforms.

The Union Finance Minister's announcement about the increase in the central pool of taxes by Rs 90 billion is a welcome one. However, if the devolution of this Central kitty to the states is not rationalised on the basis of efficiently functioning states, Maharashtra will get a raw deal, much like it did in the Railway Budget announced on Monday.

There is little alternative for the Centre but to take certain unpleasant decisions. Even the Democratic Front government did the same thing some time back. It is almost as if the Centre is imitating the state government's decisions.

The Maharashtra government has taken bold decision to affect amendments in labour laws, aimed at increasing employment, in recent times. The central government seems to have accepted this in principle as reflected in the Budget.

The Budget assurance to reward states taking pragmatic decisions was a positive announcement. States undertaking reforms in the energy sector would be helped. Maharashtra will certainly have to be rewarded for having already initiated key energy sector reforms.

I am concerned about low levels of spending on agriculture and the social sector. This, does not bode well for the future growth of the economy. Also, if the state are responsible for creating infrastructure, we must also get the finances for this.

The states' funds for development must be increased. Non plan expenditure has to be pruned. The government had said it would increase spending on health to 6 per cent of GDP. Now it is not even 1 per cent.

Source: Business Standard

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