CHANDIGARH: The Haryana government today suggested to the 15th Finance Commission to consider including performance-based parameters for devolution of central taxes to states.
The state government also suggested incentivising the states to boost their efforts towards raising additional resources, adoption of Public Finance Management System (PFMS) and Direct Benefit Transfer (DBT) to improve efficiency of the state expenditures, allocation of more resources in rural areas, incentives for cropped area, irrigated area and forest area and encouraging investment in national priorities.
The suggestions were made by Haryana Chief Minister Manohar Lal Khattar during a meeting with the 15th Finance Commission here today, an official release said.
Haryana Finance Minister Abhimanyu was also present at the meeting. The chief minister also suggested indicator matrix for horizontal devolution.
He said the level of capital investments made in the next five years on physical and social infrastructure would decide the country's growth trajectory for the next few decades.
To this end, it is suggested that the devolution formula may include a parameter which takes in to account performance of the states in terms of their capital expenditures, and allocates more resources to better performing states.
He said that weight assigned to population also needs to be apportioned based on rural and urban population divide.
It is important that the states wherein majority of population lives in rural areas are allocated more resources.
Moreover, the population parameter should also take into account other key demographic factors such as improvement in sex ratio (female to male), and population of youth.
A delegation of the 15th Finance Commission, including member and economist Ashok Lahiri, was here to assess the financial needs of state.