Chennai, Aug 7:
The Tamil Nadu Assembly on Friday adopted an uanimous resolution urging the Union Government to ensure fair and equitable tax devolution to states.
The resolution moved by Finance Minister Marie Wilson was adopted unanimously by voice vote with the support of all parties including the main Opposition DMK and the AIADMK.
Noting that fiscal and cooperative federalism are the Constitution’s basic principles, the Finance Minister said a fair and balanced fiscal distribution system is essential for states to effectively discharge their responsibilities and highlighted Tamil Nadu’s consistent economic growth, industrial progress, export performance, and prudent financial management, noting that the State has been making significant contribution to national tax revenues.
He recalled the Principles of fiscal federalism enshrined in the Constitution of India and recognising that an equitable system of financial devolution is essential for enabling the States to effectively discharge their constitutional responsibilities.
Noting that the State of Tamil Nadu has consistently contributed significantly to the national economy through sustained economic growth, industrial development, exports, sound fiscal management and substantial contribution to the taxes collected by the Union Government, he said 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.
“Therefore, this August House resolves to urge the Government of India to Ensure that the State of Tamil Nadu 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, 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, Ensure 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 and 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.”
After the members of various parties expressed their views and supported it, Speaker JCD Prabhakar announced that the resolution was adopted unanimously by voice vote.