If states want funds for water, we cant insist they build roads: Narendra Modi

Written by fe Bureau | New Delhi | Updated: Apr 19 2014, 06:14am hrs
MOdiNarendra Modi: Indian Railways and PSUs like Coal India would need to be professionalised. PTI
Narendra Modi on Friday stressed that the Centre must play the team leaders role and willingly co-opt state governments into the decision-making apparatus. He also said the Indian Railways and PSUs like * Coal India would need to be professionalised. When pressed for an answer on whether he would allow privatisation, Modi said: Even that decision should be based on professional advice, not political. In other words, privatisation is a possible option under a Modi government, not a likely one.

Outlining his vision for governance and federalism, the BJPs prime ministerial candidate told CNBC Awaaz that states require greater freedom in deciding how to spend central funds. If, for instance, a state has done well in the area of rural roads, the Centre would now cut back its allocations under the Pradhan Mantri Gram Sadak Yojana; instead, it should maintain the outlay and allow the state to use the money in other areas of the latters choice, like water supply, he said in response to a question on whether a Modi prime ministership would mean more funds for states.

One has to be sensitive to regional aspirations. The Centre has not been able to grasp the problems of the states, Modi said. There is a lack of communication between the Centre and states... I will order and you follow; you ask and I will give (which seems to be the Centres approach) needs to change, he said.

Modis ardent advocacy of decentralisation comes on the heels of the UPA governments interim Budget effecting a big hike in the transfer of Plan funds to state treasuries: 61% of all Plan funds in FY15 will be routed through state budgets in FY15 from 25% in FY14, though states still have limited flexibility to divert funds to purposes other than the designated schemes.

Making it clear that the BJP was all for the goods and services tax, Modi said the main hitch in implementing it was that the requisite information technology platform was not ready. And the states concerns (over any loss of revenue in the GST regime) would have to addressed, he said.

The UPA government, it may be noted, has been critical of the BJPs alleged ambivalence towards the GST, which experts say is a better indirect taxation system, primarily for its ability to avoid cascading of taxes in B2B transactions.

The Centre needs to treat states as equal stakeholders regarding the issue of GST. Any act or law which goes against the interests of even a single state wont be good for the country as a whole. States need to be taken into confidence, Modi said.

Modi rued the slothfulness of PSUs and made a strong pitch for a professional approach to their management. The Gujarat Fertilisers workers came to me, he said, with tears in their eyes as their unit was about to be shut... We professionalised the unit and today it is one of the most profitable PSUs in the state. He added, The Gujarat Electricity Board had a loss of R2500 crore, but today it is profitable and supplies electricity 24/7.

Modi singled out the railways as the countrys growth engine and one closely linked to the development plans of the states. He said: We have separated decision-making at the railways from what is good for the country and the states. The decisions are now based on political preferences. We need to take professional decisions and (in national interest), he said.

Sticking to the BJPs stated policy on foreign direct investment (FDI) in multi-brand retail, he said further deliberations were needed on the issue. We are not against foreign investment but we need to think through FDI in retail... The question of FDI should be seen in the context of encouraging domestic manufacturing sector, which is essential for creating employment opportunities, he said. The BJP, he added, favoured FDI in those sectors (where it is needed) for job and asset creation, infrastructure and acquisition of niche technology and specialisation.

On subsidies, he said: In India, the poor have always had a right on the exchequer, and will continue to do so. However, the aim, he said, was not to keep (people) poor by handing out more dole to them but to eradicate poverty.

On the question of whether he would pursue investigations into high-profile cases such as the Robert Vadra one, Modi said if he is voted to power, priority would be given to preventing corruption in future, rather than addressing the old cases.

On foreign policy and especially on diplomatic ties with the US, Modi said the parameters of the same had undergone a drastic change in the post-globalisation era. The country needs to work on trade, commerce and technology with other nations, including the US, he said.