Urban News

The Business Line 21.07.2009

Finance Commission focuses on better fiscal devolution

— P.V. Sivakumar

Key role: Dr Vijay Kelkar, Chairman of the 13th Finance Commission, in Hyderabad on Monday.

Our Bureau

Hyderabad, July 20 The Chairman of 13th Finance Commission, Dr Vijay Kelkar, today said that the Commission’s focus is on ensuring continuity and covering of some fresh ground to ensure better fiscal devolution.

It is also eliciting views from States on the Goods and Services Tax (GST) implementation as the new tax regime is all set to come into being by April 1, 2010.

The Commission is keen to help in ‘grand bargain’ between Centre and States in GST implementation, he said.

The country’s financial sector is prudently sound. Inflation is under control and balance of payments position continues to be fine. The Government has initiated monetary, fiscal and sectoral policy measures to minimise the negative impact, Dr Kelkar felt.

Speaking at a meeting with the Andhra Pradesh Chief Minister, Dr Y.S.Rajasekhara Reddy, he said some States have increased capital spending without adequately providing for operational and maintenance expenditure.

Complimenting the State for its fiscal record and implementation of Fiscal Responsibility and Budget Management Act, he expressed the need to reduce the debt to Gross State Domestic Product (GSDP) ratio, which is currently at 31.1 per cent as against the recommendations of 28 per cent.

While Dr Kelkar expressed happiness with State’s efforts to execute Rs 65,328-crore worth projects under public-private partnership mode, he was concerned with the aggregate losses of Rs 2,770 crore in the public sector entities.

The Commission cited State Accountant General reports showing cost overruns of Rs 6,127 crore (by 2008) in irrigation projects and incomplete multi-purpose projects with significant irrigation component.

“Another major concern that could potentially jeopardise the State’s impressive fiscal achievements is subsidies both food (Rs 1,900 crore) and power (Rs 2,385 crore). Subsidies detract scarce resources and prudent control is essential,” he said.

The Andhra Pradesh Chief Minister earlier highlighted some of the key achievements in State’s fiscal management, increased investment in irrigation sector and efforts to bring in all round development.

The World Health Organisation(WHO) will conduct a survey in various relief camps in Sri Lanka's North to check the health conditions of displaced Tamils, even as it described reports of the number of deaths due to diarrhea as "exaggerated".

Firdosi Rustom Mehta, new Representative for the WHO in Sri Lanka, said the situation pertaining to the maternal and childcare conditions in the IDP camps are being monitored by the organisation. He said a survey will be undertaken after three months to evaluate the situation.

Presenting his credentials to Sri Lankan Foreign Minister Rohitha Bogollagama yesterday, Mehta said "the death rate speculated by some section of media due to the diarrhea disorder in relief villages and camps housing the IDPs were exaggerated.

He pointed out that the actual figures of those affected due to the disease were well within the accepted standards and informed that the WHO had also issued a clarification in this connection.

The top WHO official said he had visited the IDP camps over five times during the past three months and that during each visit, had found the situation to be "rapidly improving".

Commending the government of Sri Lanka in this connection, Mehta said that the government should be given "full credit" for the efforts taken, a Sri Lankan Foreign Ministry statement said.Welcoming Mehta, Bogollagama thanked him for clarifying on the misinformation on the death rate attributed to the diarrhea disorder in some sections of the media, the statement said. The minister said the government is continuing with its efforts to improve the conditions in the camps.

Bogollagama also briefed Mehta on the discussions President Mahinda Rajapaksa had with the UN Secretary General, Ban Ki Moon during the recently concluded Non-Aligned Movement (NAM) Summit in Egypt where the situation in the IDP camps were also discussed.

Referring to the work done by the WHO in Sri Lanka, Mehta outlined the areas of concern for the WHO such as maternal and childcare, the outbreak of dengue, H1N1 and the situation of the IDPs in the camps.
Discussing the incidents of dengue, Mehta, a scientist, said incidents of dengue is on the decline in Sri Lanka.

Bogollagama said there is a need to eradicate the mosquito menace as it poses many health hazards and inconveniences to the public. He said public should become socially aware of the problem and its impact on the society.

In respect of H1N1 virus, Mehta stated that the thermal scanners at the Bandaranaike International Airport are functioning well and that there are about 40 cases detected so far, mainly from tourists entering Sri Lanka.

He said medicines were also provided by the WHO to treat at least 3,00,000 patients at the Infectious Disease Hospital in Angoda in Central Sri Lanka.