Chennai: Levy of GST on the projects executed for the state government was a cause for serious concern as it amounted to a fiscal transfer from the States to the centre, besides adversely affecting the financial capacity of the State, Tamil Nadu Deputy Chief Minister O Paneerselvam said.
Speaking at the pre-budget meeting chaired by Union Finance Minister Arun Jaitley in New Delhi, he said in a way, it was a tax on States, paid from the taxes collected from people. ”It is also adversely affecting the financial capacity of the States to execute works”, he said and urged the Union Government to exempt the work contracts executed for State Governments from the purview of GST.
Reiterating the need to include the revenue received from the levy of cesses and surcharges in the divisible pool of resources to the States, he said the levy of a surcharge of two percent on the super-rich that replaced the wealth tax, has shifted the financial resources from the States to the Centre.
He also urges the Central Government to include the surcharge on the super rich and other surcharges in the divisible pool of resources to the States.
On establishing AIIMS in Tamil Nadu, Mr Panneerselvam said the State had proposed five sites in Thanjavur, Madurai, Pudukkotai, Erode and Kancheepuram districts and a High-level Central Team had visited the State in April 2015 itself and had submitted its report. Noting that the final decision on the location of the AIIMS was still pending with the Ministry of Health and Family Welfare for nearly three years, he urged the Centre to finalize the location without further delay and make an announcement on this in the budget speech.
On the recent cyclone Ockhi, Mr Panneerselvam said the State Government had submitted a Memorandum seeking a financial assistance of Rs 5,255 crore, including Rs 401 crore for temporary restoration and Rs 4,854 crore for permanent restoration works in Kanniyakumari district and Rs.4,047 crore for mitigation measures to reduce flood vulnerability in Chennai City.
He also requested Union Finance Minister Arun Jaitley to include the establishment of an Integrated fishing harbour with a fish processing park in Kanniyakumari district and the implementation of Comprehensive Flood Management Programme in and around Chennai city as a permanent mitigation measure to handle recurrent flooding in the ensuing Budget.