“Though the word ‘federal’ is not mentioned anywhere in our constitution, India is, indeed, a federal nation. There are a lot of laws and amendments in our country which prove India is a federal nation,” said Union government’s 15th Finance Commission chairman N K Singh.
He was the chief guest for the 5th G Ramachandran Memorial Lecture organised by G Ramachandran Memorial Committee in association with Southern India Chamber of Commerce and Industry (SICCI) in Chennai Monday.
Speaking on the topic: Fiscal Federalism, Singh said, “Article 246 of Indian constitution and seventh schedule clearly shows the powers of the State which does give India a federal status. The union, state and concurrent list also shows the powers given to the states. Over the years, fiscal federalism has evolved but now faces a lot of problems. The 2000 act changed the tax collection system thereyby helping further sharing of taxes between the states and the Central government.”
“Now post GST implementation, it has subsumed majority of the taxes. To sort out issues in GST, the GST council was formed which turned to be the reason CGST and SGST came into picture. But, the overall result is GST is that States have lost their atonomity on deciding tax rates. Now states are fully depending on Centre for funds. They are now feeling the need for direct taxes. At this juncture I would like to point out that the relation between GST council and finance council needs more concentration,” he added.
Guest of honor K S Sripathi, who was the former Chief Secretary of Tamilnadu, spoke a few words about G Ramachandran and the chief guest. Then he added, “The attitude of the states in demanding funds from the Centre all the time should change. At the same time, the Centre shouldn’t stay indifferent when states ask for funds during the time of crisis.”
Earlier, SICCI president R Ganapathy welcomed the gathering and briefed about the life of G Ramachandran. SICCI vice president Ar Rm Arun was among others present during the event.