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Bhopal: States need to mobilise their own resources, says Montek Singh Ahluwalia

08:12 AM Feb 19, 2020 |

BHOPAL: Former deputy chairperson of the erstwhile Planning Commission Montek Singh Ahluwalia was in city on Tuesday to address a workshop ‘Alternative Finance for Projects’. In an exclusive interview to Free Press, Ahluwalia suggested ways to boost state economy.

The excerpts:

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Q&A to Montek Singh Ahluwalia

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Any specific plan/suggestion for Madhya Pradesh

I have not looked at details of Madhya Pradesh but the answer for all state governments is that you must do a better job mobilising your own resources.The government must do a better job on spending the money that it has got.

And today's discussion was bringing in more private money to do the kinds of things that normally are done only with public money. So that's the innovation. And I think that's a very good and very important.

Why such planning when centre has more financial powers compared to state

All states say like that. It's true that the centre has a lot of financial power. But then that is devolved. You may argue whether the devolution is enough or not. But on the other hand, states are financially sovereign; they have a certain share of revenues coming in.

We don't know what that's going to be like in the next five years because we only have an interim report. Basically the state is a sub sovereign body. And the only difference between the centre and the state is that the centre can finance any deficit-by simply printing money, the state cannot do that. Now all states are finding out innovative ways for it.

Will GST spell more trouble for states

There shouldn't be any trouble on the devolution pattern. Government had expected a certain amount of revenue from the GST. The state governments had built in that they were to get their share of it.

But since the revenue realisation has been much lower, the amount of revenue generated has been lower, not just for Madhya Pradesh, but for all states and that has been a problem.

The states guaranteed certain growth in revenue and the central government predicted growth on its ground. I hear a lot from states that the centre has not actually fulfilled that promise.

Your new book talks of former PM Manmohan Singh’s resignation

I cannot comment on it. Media picks only a part of portion that suits it. There are several other things in it.

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