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N-E states demand more assistance to meet fiscal burden

Supporting the mid-term fiscal reforms, the North-Eastern states demanded more central assistance to meet increased fund demand on account of the revision of pay scales and dearness allowance.

"Finance ministry must provide additional revenue gap grant at least to cover the incremental impact of revision of pay scales patterned on the basis of the Fifth Pay Commission," O Ibobi Singh, Chief Minister of Manipur, said at the meeting of chief ministers on the fiscal situation of the states in New Delhi on Friday.

The disparity in DA - 49 per cent of basic pay for central employees and 38 per cent for state employees - was "not only unfair but also unsustainable and a provision for supporting the special category states should be made" Ibobi Singh added.

Nagaland contented that total transfer of funds from the Centre to the north-east states had come down to 7.99 per cent from 9.84 per cent in the 10th Finance Commission.

On bringing the debt to sustainable levels, all the N-E states said that the financial institutions should grant loans on the viability of the projects without insisting on the state guarantee.

Though most of the states welcomed the provision of service tax under VAT, Arunachal Pradesh Finance Minister Rima Taipodia said it was difficult for the state to meet the deadline on its implementation by April 1, 2003.

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