State finance ministers during a pre-budget consultation with Union Finance Minister P. Chidambaram have reiterated their demand that states should be paid higher compensation in the wake of reduction in the Central Sales Tax (CST) from 4% to 2 % in Goods and Services Tax (GST) regime.
Speaking on the occasion, the finance minister of Andhra Pradesh
asked for five major initiatives by the Centre to reverse the present deceleration of economic growth. Andhra's FM Anam Ramanarayana Reddy said that GST regime should be introduced from April 1, 2013 by moving forward from Value Added Tax (VAT).
According to reports, Chidambaram has expressed that he is ready to outline necessary amendments to the Constitution in his 2013-14 budget speech, provided the State governments arrive at consensus on issues that are proving to be hurdles in the rollout of the new indirect taxes regime.
During the discussions at pre-budget consultation meeting, on the specific demand for increased compensation owing to the cut in CST, the States were told that though the Centre was open to the idea — a position the Union Finance Minister voiced even earlier — much would depend on the overall fiscal situation as reported by The Hindu.
Chidambaram also asked the various state governments to provide speedy clearance for projects so as to expedite investments and kick-start the growth process.
Andhra FM demanded that the Central excise on gas and customs duty on imported coal and gas must be reduced to make power available to consumers at lower tariff. He said that pending settlement of the Central Sales Tax, the Centre should provide for payment of compensation against this in the budget to bolster the confidence of states.