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Budget 2016: Here's what states want from Finance Minister Arun Jaitley

In the run-up to the Budget, Arun Jaitley met his start counterparts for a consultation.

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Here are some of the demands put forth by the states during the pre-budget meeting
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Finance Minister Arun Jaitley met his state counterparts on Saturday as part of the pre-budget consultation process. Some of the topics that were expected to be discussed included the preparatory work for the roll-out of the Goods and Services Tax (GST), issues concerning the implementation of the 14th Finance Commission, Central Sales Tax (CST), and others. 

Here are some of the demands put forth by the states during the pre-budget meeting -

- Continuation of certain Centrally-Sponsored Schemes (CSS) such as Sarv Shiksha Abhiyan, Madhyamik Shiksha Abhiyan, ICDS, National Rural Health Mission, and the like on the old pattern as many states find it hard to sustain them from their own resources.

- The Centre should release the long pending compensation for phasing out Central Sales Tax (CST) and provide for such funds in the upcoming Budget.

- Higher allocation in the upcoming Budget to implement Pay Commission recommendations as well as under CSS. Currently, the government has decided to make provision of Rs 1.10 lakh crore for the commission and for the One Rank One Pension Scheme. 

- Provide special assistance to the states to meet the additional burden arising out of the implementation of the 7th Pay Commission, and raising borrowing limit as per the recommendation of the 14th Finance Commission.

-  Sharper focus on agriculture, which has suffered in the last two years due to inadequate monsoon.

- The representative of Assam Chief Minister Tarun Gogoi requested the government to allow raising market borrowing within the prescribed limit without reduction. The 14th Finance Commission had recommended that states that have maintained financial discipline should be allowed to borrow 3.5% (of the state's GDP), up from 3%.

- The government should also provide special assistance to the state for meeting the burden arising out of 7th Pay Commission recommendations on the state exchequer as states too will have to increase the salary of their employees.

At the end of the meeting, Jaitley assured the gathering that the Centre would cooperate with every state, and as the growth of states increases, the national growth will be on the rise.

Jaitley said, "The states have discussed their own resources and each one of them is competing for higher resources, higher investment and they are all geared up to fight this environment of global slowdown so that India remains an economy which is on the move."

Jaitley, however, wanted them to step up spending on infrastructure and poverty alleviation schemes as the 14th Finance Commission has devolved higher funds to them.

"We expect that those states whose resources have been increased after the implementation of the 14th Finance Commission will spend further on infrastructure creation and anti-poverty programmes since their incomes have increased considerably," Jaitley told reporters.

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