The Telegraph
Thursday , January 9 , 2014
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Purse strings under Centre scanner
Finance panel in Ranchi for funds talk

Ranchi, Jan. 8: Members of the 14th Finance Commission, chaired by former governor of Reserve Bank of India Y.V. Reddy, arrived in Jharkhand today to hold threadbare discussions with chief minister Hemant Soren during their three-day stay here.

The visit of the 14-member team, which was received by state finance minister Rajendra Prasad Singh and others at Birsa Munda Airport this afternoon, comes at a time when the state is in urgent need of streamlining finances given that 37 per cent of its population live below poverty line (BPL) against a national average of around 21 per cent.

“Tomorrow at exactly 10am, the team is scheduled to meet chief minister Hemant and his cabinet, senior officials, including the chief secretary and secretaries of various departments, DGP, principal chief conservator of forests and others at a city hotel,” state finance secretary A.P. Singh told The Telegraph.

According to latest Planning Commission data released in 2012, the number of poor in Jharkhand dipped by 6.2 per cent between 2004-05 and 2009-10.

The decline in poverty in rural areas has been significant. It dipped by 10 per cent to log 41.60 per cent from 51.60 per cent.

However, urban areas displayed another trend with poverty levels rising to 31.10 per cent from 23.80 per cent. The overall BPL percentage stood at around 37 per cent.

Tomorrow afternoon, the finance commission team, along with senior state government officials, would embark on field visits to some villages of Namkum under Ranchi district to get a first-hand look at developments in floriculture, diary farming and, most importantly, sericulture that has spun the success story of state-run Jharcraft.

The commission, after hearing the state’s financial needs, will recommend sharing of tax proceeds between the Centre and the state for the five-year period between 2015 and 20.

Tomorrow, the state government will make a detailed presentation on its finances and its projection for the mandated five-year period.

The team may also interact with representatives of political parties, panchayati raj institutions, urban local bodies and trade and industry associations tomorrow.

Notably, Jharkhand has been seeking a larger share of mining royalties from the Centre for the past couple of years, given that the state is one of the biggest producers of some major minerals, including iron ore and coal.

This apart, the issue of rationalisation of state share in central taxes and a better deal in ongoing railway projects are among the main demands pending with the finance commission as well as Planning Commission.

During a meeting on December 30 last year, the state government decided to ask the Centre to agree to a forest management institute in Jharkhand and a regulatory body to monitor functioning of mines. This is likely to be raised with the finance commission team.

The 14th Finance Commission, a constitutional body headed by former RBI governor Reddy, includes secretary Ajay Narayan Jha and member (part time) Abhijit Sen, also a Planning Commission member.

Besides, former Union finance secretary Sushma Nath, director of National Institute for Public Finance and Policy, Delhi, M. Govinda Rao, former acting chairman of National Statistical Commission Sudipto Mundle are also on the committee.

The finance commission has already toured over a dozen states. By the end of 2014, the commission will recommend devolution of central funds to the states for the period between 2015 and 2020.

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