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Speaking
to Business Line here, he said the benefits of a
seamless home market are intrinsically appealing and
that he was open to reforms needed on that count.
DENIAL OF
RIGHT
But that
does not mean the Centre can deny the States’ right to
legislate and fix a rate that suits its fiscal needs
best. It will also amount to trampling of a
Constitutional privilege bestowed on the States.
The
dual-structure GST proposal (instead of a single
national GST rate) entails a Central GST rate and a
separate GST rate for the States (but not different
among the States). According to Dr Isaac, there are many
countries where a Central and varied provincial GST
co-exist successfully.
Even the
European Union has achieved a single, efficient market
with member-States fixing individual rates.
The
country is committed to its transition into a GST regime
by April, 2010. But Kerala will forcefully make its
dissenting voice heard in the appropriate forum, the
Finance Minister said.
Market
Borrowings
Off-budget
borrowings from market through special purpose vehicles
is an option the State Government is exploring to take
advantage of the relaxation on FRBM targets announced in
the Union Budget.
Responding
to another query, Dr Isaac said the State Government was
opposed to the proposed move for separating debt
management functions from the RBI and setting up a
separate Debt Management Office under the Finance
Ministry.
Given the
past experience, it would be a gross injustice to the
State Governments to be left to the mercy of the
bureaucrats in the Finance Ministry to take a decision
on floating debt paper.
Dr Isaac
rooted firmly for the existing mechanism available with
the Reserve Bank where State Government representatives
are involved in decision-making with regard to
underwriting of the amounts being raised as State
Development Loans and the fees thereof.
He also
said the State Government was open to the Twelfth
Finance Commission recommendation that mooted the
platform of an inter-State Loan Council for this
purpose.
Source
: The Hindu BusinessLine, India, dated
16/08/2009
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