Gujarat has asked the 15th Finance Commission to increase devolution of central tax revenues to states to over 50 per cent, from 42 per cent at present.
The Commission, led by N K Singh, felt that the state has made rapid progress in key macro economic parameters, but GST remains one of the big challenges.
The state government, on its part, has urges the Commission to increase devolution to over 50 per cent, expand the net divisible pool, and suggested an alternative formula for devolution based on urbanisation and social deprivation, an official statement said.
Gujarat is improving its expenditure in health and education – areas which deserve fuller attention over the coming years, Singh mentioned.
“Gujarat has shown the lead in achieving more balanced development among primary, secondary and tertiary sectors,” he said.
Of the challenges being faced by Gujarat GST collections. “Once the 14 per cent guarantee as GST compensation by the union Government winds up, Gujarat will need to look at the GST collection projections seriously and tax buoyancy may become an issue,” the statement added.
The other challenge relate to how to restructure National Disaster Relief Fund considering Gujarat is prone to various kinds of natural disasters.
The 15th Finance Commission is on a three-day visit to Gujarat. The other members of the Commission include Shaktikanta Das, Anoop Singh, Ashok Lahiri and Ramesh