Niti Aayog meet: Give revenue from indirect taxes to states, says Edappadi K Palaniswami

Tamil Nadu Chief Minister Edappadi K Palaniswami on Sunday pitched for a new model of resource sharing thereby the state takes all the indirect taxes to augment its own resources to overcome the limitations in mobilising funds in the post-GST era.

In his address at the fourth meeting of the Niti Aayog Governing Council, he said his suggestion was in practice in developed countries.

"In the post-GST era, the flexibility of states to augment their own resources and mobilise more is limited. It is time we think of a new model of resource sharing to effectively deal with present development challenges. As is the practice in developed countries, one suggestion is to levy and appropriate all indirect taxes which can be given to states and the Union government can retain the direct tax revenues," Palaniswami said.

He suggested that alternatively the power of collection and appropriation of personal income tax could be vested with states as it would take care of the growing needs of states to implement development programmes. "Thus, the present complicated process can be simplified," he said.