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The Tamil Nadu government on Friday will move a resolution in the Assembly, urging the Centre for equitable and fair devolution of taxes, invoking the principle of fiscal federalism.
Tamil Nadu Finance Minister N Marie Wilson will move the resolution asking the Centre to ensure that the State receives its due share of financial devolution from the taxes contributed to the Union Government, consistent with the constitutional principles of fiscal federalism, equity and fairness. The resolution also urges the Centre to adopt a "transparent, objective and equitable methodology" for the devolution of central taxes that "appropriately recognises the contribution, fiscal effort, governance performance and developmental needs of the States." The TVK-led government will also demand that the criteria adopted for tax devolution do not place any State at a comparative disadvantage on account of its achievements in population stabilisation and human development. "Appropriate measures should be taken to safeguard the legitimate financial interests of the State of Tamil Nadu while making future arrangements relating to the devolution of Union taxes," the resolution states. In the backdrop of the stir over the delimitation exercise in the Lok Sabha, the resolution also mentions, "Further noting that the devolution of Central taxes should be based on the principles of equity, fairness, fiscal effort, governance performance and the developmental requirements of the States, while ensuring that States which have successfully implemented population stabilisation and human development initiatives are not placed at a disadvantage." Devolution of central taxes has been an issue of contention between the Tamil Nadu government and the Centre. Meanwhile, on August 1, the Union Government released an additional instalment of Rs 1,09,019 crore as tax devolution to state governments, ahead of the regular monthly transfer due on August 10. Tamil Nadu received a major allocation of Rs 4,600 crore. (ANI)
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