Though both Haryana and Punjab are pre-dominantly agrarian states, when it comes to the Centre?s inclusive growth strategy, the two seem to have diametrically opposite stands.
A study, Talking Points, prepared by state planning boards for both Haryana chief minister Bhupinder Singh Hooda and Punjab chief minister Parkash Singh Badal, shows that while Haryana wants the Centre to reward better performing states, Punjab wants weightage in funds allocation for those with lower growth rate.
Haryana has taken the plea that the ??income criteria is heavily loaded in favour of poorly managed states and is biased against better performing states like Haryana??. It wants a reduction in weightage for income needs to 10% from the existing 25% so that better performing states are rewarded for their developmental efforts. Significantly, Haryana?s gross state domestic product grew at 8.2% during the 10th Plan.
In Punjab, Badal admits that the ??Punjab economy has been consistently growing at a rate lower than the national average for over two decades now. Stagnation in agriculture and prolonged militancy has primarily contributed to sluggish growth. Punjab had to resort to heavy market borrowings to fund its development process leading to outstanding debt of Rs 48,344 crore in the last fiscal and interest payment outgo of more than Rs 4,000 crore per annum.?? He admits that the situation is not likely to improve as the state?s growth remains dependent on agriculture and. As such, Badal has expressed concern over ??low devolution of central taxes to Punjab.??
Hooda, meanwhile, says, ??I advocate the criteria for giving incentives to fiscally well-managed states. The criteria of fiscal management measured in terms of tax efforts, efficiency in collection of tax and non-tax revenues and economy in expenditure should be adopted, which will do justice to the fiscally well-managed states.??
However, both Punjab and Haryana agree on the issue of increase in state share in the gross proceeds of central taxes from 30.50% to at least 50%. There is unanimity that as the revenue component of state Plan outlays had gone up to over 50% compared with 30% prescribed earlier by the Plan panel, there was need to revise the ratio of central assistance from 70% as loan and 30% as grant to 50:50 basis to lessen the debt burden of states. The two want the Centre to either enhance their share in service tax .