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115 Re appointment of [ RAJYA SABHA ] a Parliamentary Committed 116 RESOLUTION RE: APPOINTMENT OF crores, Tamil Nadu—485 crores and A PARLIAMENTARY COMMITTEE TO Orissa—560 crores. These are their GO THOROUGHLY INTO THE outstanding loans to the Centre as on 31st MATTERS COVERING LEGISLATIVE, March, 1976. The current figures must be ADMINISTRATIVE AND FINANCIAL higher. Now, these loans are costing the states RELATIONS BETWEEN THE CENTRE Rs. 517 crores by way of interest charges AND THE STATES, EMERGENCY and so on. This is the figure for 1977-78. PROVISIONS IN THE CONSTITUTION In 1978-79, the figure will be Rs. 567 OF INDIA AND PLANNING—contd. crores. This is the interest that they have to MR. CHAIRMAN; Mr. Bhupesh Gupta to pay. Apart from this loan, there is the continue. problem of overdrafts. As on the 28th April, 1978, the overdrafts in respect of various SHRI BHUPESH GUPTA (West Bengal): States stand as follows: West Bengal—118.89 Sir, I was speaking on the issue of Centre- crores, Uttar Pradesh—142.19 crores, State relations in support of the Resolution Punjab—60.40 crores, Bihar—83.27 by our friend. Here I would like to give you crores, Madhya Pradesh—62.16 crores and some facts. Sir, Stateg are being reduced to Rajasthan.—3.27 crores. Altogether, the so many beggars, completely dependent on outstanding overdrafts come to Rs. 470.18 the Centre in many matters. crores. Apart from that, there are ways and [Mr. Deputy Chairman in the Chair] means advances and special advances amounting to Rs. 130 crores. This is the As a result, we have now arrived at a stage position. What are the revenues of the States? If when the position of the States is like this. I you take the revenue position of the States, that am drawing on the official reports, reports of should cause you alarm. I can just give you the Reserve Bank, Currency and Finance and some ot the broad figures. State revenue similar other official documents. They are all on revenue account, that is to say, their available for the Members. Sir, according to internal tax revenue plus the share they get the latest report of the Reserve Bank, the from the central tax, comes to 9,777.6 crores. debts of the States/ of India comes to Rs. This is estimated. Then the internal tax 16,263 crores, out of which the internal debts revenue within the States comes to estimated of the States account for Rs. 3296 crores. 4,339 crores out of which Rs. 2,495.1 crores is Loans and advances from the Central accounted for by the Sales Tax. It means that Government come to Rs. 11,369 crores and more than half comes from the Sales Tax. The the Provident Fund etc. amount to Rs. 1,593 amount of capital receipts from the Centre crores. comes to Rs. 2,854 crores—I am giving 1977- 78 estimate figures—, disbursements come to Now, the States of India are in this position Rs. 3,884.3 crores, and the deficit is today that they have to carry a load of Rs. 1,030 crores. This is the position of the indebtedness of the order of more than 16,000 States. Now, Sir, what happens as a result? crores of rupees. Now. Sir, what is the As you know, under our Constitution, there is a position about their finances?, Sir, as far as the provISon for transfer of resources from the indebtedness is concerned according to the Centre to the States. latest figures available in regard to the States, the amount of outstanding central loan from How many minutes can I take? the States as on 31st March, 197S is as follows MR. DEPUTY CHAIRMAN: Till before in respect of certain States: Andhra Pradesh— lunch. 770 crores. Bihar— 836 crores, Uttar Pradesh—1,073 crores, West Bengal—S46 SHRI SUNDER SINGH BHANDARI crores, Assam—143 crores, Rajasthan— (Uttar Pradesh): Are you sure we adjourn for 820 I lunch at the right time? 117 appointment of [ 12 MAY 1978 ] a Parliamentary Committee 118 SHRI BHUPESH GUPTA: Some Now, Sir, as you know, the customs duty transfer takes place under the mandatory is not at all shared with the States. provisions of the Constitution and some The corporation tax is not shared at under the permissive provisions^ like the all with the States. No amount is sharing of income-tax and excise duty shared of these two major items of Central revenues. You will be surprised to find revenue at all. Now, how can they get the how dependence is growing and funds. Only 20 per cent of the net discretionary funds are increasing, which receipts of excise duty is shared with the are determined by bureaucrats, Ministers States. Why should it not be at least fifty and others. per cent, if not more, of the Union excise duty? You do not share Union excise duty in a bigger proportion with the States and During the First Plan period transfer ask the States to stop sales tax. Why can it from divisible resources, i.e., income tax not be done? Similarly, Sir, income-tax and excise duty, was of the order of Rs. and other problems are there. The 326 crores, during the Second Plan it Finance Commission is no solution to the was Rs. 711 crores, during the Third problem. They will not solve the Plan it was 1,196 crores, during the problem. We have to make some changes Fourth Plan it was Rs. 4,562 crores and in the Constitution. We have to give during the first three years of the period more economic powers to the States. 1974—79 it actually eame to Rs. We should make such a provision 8,335 crores. Now, if you compare under the mandate of the Constitution these figures with the figures of grants- and under the statute of the Constitution in-aid for ths corresponding period, you so that the States get a greater share of the will see that the allocation during the First resources. In that case why the customs Plan was Rs. 103 crores, during the and corporation taxeg should not be put in Second Plan was Rs. 207 crores, during the divisible pool, we cannot understand at the Third Plan was Rs. 394 crores, during all, and a certain proportion of the the Fourth Plan was Rs. 858 crores divisible pool distributed to the States and during the first three years of the under the direction of the Constitution. period 1974—79 was Rs. 2,820 This is the financial position of the State. crores. Now, if you compare these And the Finance Minister says; No debt figures with the transfers through the is going to be written oflf. This is what Planning Commission, which is the Finance Minister declared. Now you discretionary, depends on the Minister, have seen how the States have been made Department, Secretary, you will see that dependent. If the States complain, there the allocation during the First Plan was is reason for it. Their liabilities are Rs. 1413 crores, during the Second increasing; their development activities Plan was Rs. 2868 crores, during the are increasing but their revenue, Third Plan was Rs. 5,600 crores, sources—internal and even the part of during the Fourth Plan was Rs. 15,312 the revenue from the Centre to the crores end during the first three years of States—are declining proportionately the five year period between 1974—79 speaking, compared to the rest. the figure was Rs. 26,901 crores. This Therefore, in financial matters, there is would show that whereas the need not only for providing more and discretionary grants amount is increasing, more resources but also for giving them leaving states dependent on the more economic powers and financial Minister, bureaucrats, ofificials, powers so that they can raise their internal under the cover of Planning resources. All the public financial Commission or otherwise, the share of institutions are under the control of the the mandatory grants under the Government. They cannot do Constitution or permissive grants is declining proportionately. That only showg where we stand. 119 Re appointment of [ RAJYA SABHA ] a Parliamentary Committee 120 [Shri Bhupesh Gupta] .anything. Economic for the Govexnor's report. He just policies are formulated by the Central dismissed nine governments by a stroke Government. The States cannot do anything. of pen on the 30th of April '-last year. Be-isides, the Central Government have the Now, Sir, these are the Articles which need foreign loans^ gold .and deficit financing. All attention: Articles 154 248, 249, 252 Clause 2, these things are not available to the States. 258 Clause 2. 365, and there are niany other Therefore, Sir, there is a very strong case, apart Articles which give the Governor the powers from its political aspect, •.the whole number of to reserve Bills for the President's assent, or the Articles need reconsideration. Apart from hg need not give assent at all. Why should it Article 356, which provides for President's be so? If the Bills are passed by a State rule, other Articles are there. We do not want legislature, certified by the Speaker of the President's rule. concerned Statg legislature, they should be immediately the law of the land. If they are The Institution of President's rule must go. ultra vires, courts are there. Anybody can go Sir, if the Government cannot "be run, then, of to the court. The Central Government can go course hold the elec Vions as happened in the to a court and challenge it.

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