NEW DELHI, May 10: Asking for more, the States today rejected the Tenth Finance Commission's proposal for allocating 29 per cent out of the Central pool of taxes to them. The proposal was turned down at a meeting of the standing committee of the Inter-state Council.

The meeting saw a scathing attack on the United Front Government at the Centre by Andhra Pradesh Chief Minister Chandrababu Naidu, who charged the Front of merely talking about Federalism.

``Even under the UF Government, the Centre continues to exercise its hegemony over the states. This is deplorable in a Government which owes its existence to federal principles,'' the Telugu Desam Party leader and a key member of the Front said.

Criticism of the Centre -- particularly on devolution of financial powers and the abuse of Article 356 -- was expected. But Naidu's remarks stood out because of their pointed accusation that the United Front had failed to live up to its promises.

``We made a lot of promises in the Common Minimum Programme (CMP) towards building a healthy and resilinet federal structure. Based on these promises, people had high expectations from the UF Government,'' Naidu said, according to a printed text of his remarks released to the press.

Consensus eluded the standing committee on how central taxes should be shared between the Centre and the states. Briefing reporters, Home Minister Indrajit Gupta said the committee will meet again in June to sort out the issue.

But he said the meeting gave a broad approval to the safeguards drawn up by the Centre to prevent the misuse of Article 356 of the Constitution, which empowers the Centre to dismiss a State government.

Gupta said the Chief Ministers turned down the proposal of the Tenth Finance Commission for giving states 29 per cent from the central taxes, dismissing the share as ``too meagre''. Some Chief Minister's have pitched their demand at 50 per cent.

Finance Minister P Chidambaram could not attend the meeting. Central ministers present at the meeting included S R Bommai (Human resource Development) Murasoli Maran (Industry) and M P Veerandra Kumar (Minister of State for Finance).

Besides Naidu, the Chief Ministers at the meeting included Prafulla Kumar Mahanta (Assam), J B Patnaik (Orissa), Bhairon Singh Shekhawat (Rajasthan) and Jyoti Basu (West Bengal). Maharashtra, which too is a member of the standing committee, was represented by the state's Law Minister. Gupta maintained the Centre was concerned over the delaying reaching a consensus on devolution of financial powers.

Earlier, Chandrababu Naidu reminded during the meeting that the Government had promised to be more sensitive to the ``federal dimensions of the country,'' try to restructure Centre-state financial relations and allow states autonomy to design schemes reflecting local priorities. ``On all these fronts, the UF Government had failed to live up to the expectations of the people,'' he said.

He lamented that no substantial change was being discussed as far as Centre-state financial relations were concerned. Instead of comprehensive restructuring, only the ``marginal issue'' of the tax devolution formula was being discussed in today's meeting.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.