New Delhi: Arvind Panagariya, the chairman of the 16th Finance Commission responsible for determining the distribution of taxes and resources between the Centre and states, informed TOI's Sidhartha & Surojit Gupta that the commission will adopt a comprehensive approach, addressing various issues, including GST. When questioned about the ongoing GST debate sparked by states like Karnataka seeking a fair share based on their contributions, Panagariya stated that it's premature to make definitive statements at this point.
He highlighted the Finance Commission's pivotal role in addressing such questions and mentioned the efforts made by the 15th Finance Commission to incorporate additional criteria in revenue distribution among states. Former NITI Aayog VC identified the farm sector, labor, and challenges related to urbanization as crucial areas for state-led reforms. Post-election, he recommended that the new government pursue policies to liberalize trade and privatization.
Panagariya, the chairman of the 16th Finance Commission, emphasized that the panel will take a comprehensive view of resource sharing between the Centre and states. He acknowledged the global focus on India due to its rapid economic growth and geopolitical significance, attributing this attention to India's economic performance and China's declining growth rates.
Regarding India's economic progress over the past two decades, Panagariya acknowledged a 7.9% growth rate (excluding the Covid year), emphasizing the need to tap into the remaining 3% potential. He outlined the government's role in providing a policy framework, infrastructure, and the importance of liberalizing trade. Panagariya also advocated for labor law reforms, privatization, and state-led reforms in agriculture and urbanization.
On the GST debate, Panagariya reiterated that it is a Finance Commission issue and emphasized the need for responsible decision-making considering its significant impact on the country's budgets. In response to the flexibility in the Commission's terms of reference, he stated that it shouldn't pose a significant challenge, and the Commission would discuss and address core issues responsibly.
In conclusion, Panagariya acknowledged the Finance Minister's statement that this Finance Commission would lay the foundations for a new India, expressing his commitment to a practical and diligent approach to produce positive outcomes.
