Chennai, Aug 21:
Averaging that cooperative federalism must be anchored in a robust, predictable, and equitable system of
fiscal federalism, Tamil Nadu Chief Minister Vijay on Thursday said Southern states needed fair and equitable treatment that respects fiscal autonomy, while calling upon all states to work together to reclaim flexibility in tax rate determination..
In his address at the SZC meeting chaired by Union Home Minister Amit Shah, he said, the Southern States have consistently been among the principal drivers of
India’s economic growth and contributors to the national exchequer.
“Through prudent fiscal management, investments in human development, and successful population stabilisation, our States have built resilient economies that power national progress”, he noed.
As India prepares for the next Finance Commission, the fiscal devolution framework must recognise both need and performance. States that have invested in development, fiscal discipline, and demographic transition should not be placed at a disadvantage, Vijay stressed.
The Southern States seek not preferential treatment, but a fair and equitable treatment one that respects fiscal autonomy, rewards performance alongside equity, and enables
high-performing States to continue investing in the infrastructure, innovation, and human capital that drive India’s growth, he added.
He said after the introduction of Goods and Services Tax, States currently find themselves with virtually no flexible revenue levers outside of petroleum and alcohol. There is already a provision in Article 279A(4)(e) of the Constitution that allows GST council to recommend the tax rates including floor rates with bands of GST.
All State Governments must work together to reclaim flexibility in tax rate determination.
Pointing out that together, the Southern States contribute over 30% of India’s GDP making our region one of the principal engines of the national economy, Vijay said “we are at the forefront
of the country’s manufacturing, exports, service, and innovation. By addressing our shared challenges and leveraging our collective strengths, we can unlock even greater opportunities for growth and prosperity – not just for the South, but for India as a whole.”
“In doing so, we will make a significant contribution to our shared national aspiration of building a Developed India”, he added.