The targeted date of April 1, 2010 to implement the system of goods and services tax is premature and hurried, especially since the system of value added tax had not yet stabilised, Finance Minister of Tamil Nadu K. Anbazhagan said on Thursday.
Speaking at a meeting of State Finance Ministers in New Delhi, he said the proposed GST should in no way erode the States fiscal autonomy. Also, the roadmap towards GST must be carefully chalked out based on consensus and not compulsion.
Mr. Anbazhagan said the Centre should work out fair and revenue-neutral rates for States. Tamil Nadu was yet to receive the full payment of the truncated VAT related compensation amounting to Rs.4,055.25 crore. Acts like this will not inspire confidence among the States regarding a fair GST regime, he said.
Tamil Nadu was in the process of constructing around 1.35 lakh rural houses by utilising the increased allocation under the Indira Awas Yojana (IAY). He requested the Centre to increase the unit cost of a house to Rs.50,000 from Rs.35,000 and make separate allocation to carry out essential repairs in IAY houses that are more than 15 years old.
Mr. Anbazhagan urged the Centre to increase the minimum support price for paddy to Rs.1,080 a quintal, bringing it on a par with wheat, and increase the interest subvention on crop loans to 5 per cent.
A health insurance scheme was launched by the State government to give coverage of up to Rs.1 lakh to all poor families. Given the social impact of the scheme and the fact that this is the only revenue which would not have accrued had the State not launched the scheme, I urge the Union government to exempt this scheme from service tax, he said.
The State government had brought landless agricultural labourers and unorganised labourers in several occupations under welfare boards, and welfare schemes including social security pensions. In accordance with the stated policy, the Centre should bear at least 50 per cent of the cost of the welfare programmes, he said.
The State government has requested the Centre to reduce the import duty of Low Sulphur Heavy Stock on the lines of naphtha at least for a period of three years so that it could purchase power at an economical cost and tide over the difficult power situation.
On the recession-hit textile industry in Tirupur, he said the State had conceived a Rs.800-crore marine discharge project to mitigate pollution-related issues. The Centre should come forward to bear 60 per cent of the cost, he said.