States demand more money in pre-budget meeting with Nirmala Sitharaman

State finance ministers, in their pre-budget consultations, have raised their demand for more funds, greater say in the implementation of centrally sponsored schemes and an increase in mineral royalty payments. These issues were raised by the states at a meeting convened by Union Finance Minister Nirmala Sitharaman to express their views on the 2023-24 budget to be presented on February 1.

Tamil Nadu Finance Minister P. Thiaga Rajan said that, across party lines, states said that centrally sponsored schemes limit the fiscal autonomy of states as states end up contributing a large amount in some schemes, which is more than the contribution of the Centre.

“All states, regardless of political party, indicated that fiscal autonomy is severely limited by the size of centrally sponsored schemes, by the rate of change in funding ratios of such schemes,” Thiaga Rajan told reporters.

States demanded that they be given more flexibility in implementing CSS. CSS are implemented through a joint contribution of the Union Government and the State Government

Bihar Finance Minister Vijay Kumar Choudhary said that centrally sponsored programs should be curtailed as the burden of such programs on states increases. The center should only implement central sector schemes if they want to help states, he said.

Meghalaya chief minister Conrad Sangma said he has demanded an increase in capital aid to the states. “Have called for a system where it should be linked to the population. Village-based schemes should be emphasized,” said Sangma.

Andhra Pradesh Finance M Buggana Rajendranath Reddy said he has sought special help for capital expenditures. “We have demanded that state-promoted sustainable projects be included in the green bond funding program,” said Reddy.

Himachal Pradesh Chief Minister Jai Ram Thakur sought better road, rail and air links in the state to promote tourism. GST on apple packaging will be reduced from 18 percent to 12 percent, said Thakur, who has the finance portfolio.

Chattisgarh Chief Minister Bhupesh Baghel asked the Center to release funds for the implementation of the old state government employee pension scheme.

He also demanded an increase in royalties for minerals mined in the state and the setting of different royalties on different grades of coal and iron ore.

According to a release from the government of Haryana, Prime Minister M. L. Khattar demanded that the center give a special economic package to Haryana as 14 districts of the state fall in the National Capital Region and a lot of resources have to be spent on construction and the maintenance of infrastructure in these areas.

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