labels: economy - general
Northern CMs to strengthen North Indian economynews
28 September 2006

Chandigarh: The Three Task Forces on inter-state barriers to trade, power and water and e-governance presented their recommendations today at the plenary session of the PHDCCI chief ministers' conclave, which was inaugurated in Chandigarh by the Prime Minister earlier today.

The recommendations were presented to the chief ministers of five Northern states - Shiela Dikshit of Delhi, Gulam Nabi Azad of J&K, Veerbhadra Singh of Himachal Pradesh, R S Hooda of Haryana, Capt. Amrinder Singh of Punjab, Gen. (Retd) S F Rodrigues, administraotor of Union Territory of Chandigarh and Montek Singh Ahluwalia, deputy chairman, Planning Commission. Delegations from Uttar Pradesh and Rajasthan, lead by their respective industries ministers, represented their CMs who could not be personally present. The three high-level task forces were constituted to consider critical subjects considered of paramount importance to the growth and development of the region and to make actionable recommendations achieving greater economic cooperation between the states in the northern region along the lines of the North India common economy (NICE).

The concept of NICE, promoted by PHDCCI, is similar to economic blocs especially the European Union. PHDCCI has taken upon itself the task of acting as a catalyst agent towards a common economic and socio economic agenda between the states leading to greater industrial growth, economic growth and overall development of the region. The highlights made by the Task Force on Removal of Interstate Trade Barriers, were: Removal of barriers particularly for movement of agro produce Sales tax reforms needed on an urgent basis

  • CST phased out in a time bound manner as suggested by the empowered committee
  • Computerisation and automation of administrative procedures
  • All States to urgently undertake complete automation of all procedures related to tax administration. All forms should be made available in demat version.
  • All state governments should install the TINXSYS by 1st April 2007. Beyond this date only electronic filing should be acceptable. All forms could be integrated into one comprehensive form for self-assessment and self-declaration
  • The Task Force considered the need for a statutory body under Article 307 to enforce discipline across state for achieving a common market
  • State governments should set up independent commissions with a time period of three months to comply with the lists various orders in effect and suggestive list of those orders that could be repealed immediately
  • State governments should agree to withdraw all incentives and deferment on sales tax and pledge that these shall not be reinstated in any form.
  • All States should implement VAT. The state VAT should be levied at uniform rates on the basis of destination principles. Administrative procedures for VAT be simplified and made uniform across the States
  • Entry tax, levied by several states, distorts inter-state trade. It results in discriminatory treatment of goods acquired from outside the state, relative to the local goods
  • The chief ministers of all the Northern states should pass a resolution that entry tax under any nomenclature in their respective states will not only be repealed and but also not reinstated in any form in future
  • Task Force suggests that the States could levy land or property tax to make up for the loss of revenue on account of repealing of entry tax
  • Motor vehicle taxation should foster development of the road transport sector. The structure needs to be simplified and there should be a single-point taxation, especially in the case of inter-State traffic
  • The existing system of granting national permits with endorsement of different States should be abolished and that there should be only two categories of permits, inter-State and intra-State permits
  • The various taxes may be converged. One-time MV tax on vehicles should be implemented as it saves time and is easy to administer
  • All other Trade distorting Taxes like Bhandara Tax, Road Tax in HP should be repealed
  • There should be uniformity of classification of goods as well for the purpose of levying of taxes

The Task Force On Power & Water Sufficiency recommended:

  • Implementation of the Electricity Act, 2003 to help create a conducive environment for augmenting investments in the sector;
  • Although power is a concurrent subject, there is need to work out methodology to ensure that the national directives pertaining to power sector reforms that are very much in the interest of the states, are taken care of by the states and implemented.
  • Cross trading between states for power projects is not acceptable to GOI. There is need to introduce mechanism to facilitate bilateral/ tripartite agreements between/ among the states to set up new power plants.
  • The Centre should allow some flexibility to the states with respect to negotiating the payment of royalty to the host state where the plant would be set up.
  • Identify projects for joint development by the Northern States including Madhya Pradesh and Chhattisgarh.
  • Strengthen power availability round-the-year in the region by improving bilateral / banking arrangements among the states in the region
  • Lay out a clear road map for private sector participation in the power sector, clearly identifying and listing the areas in which private investment would be facilitated and encouraged.
  • To promote private investment in power generation, it is desirable that State should offer payment security package similar to that they are offering to Central PSUs of tripartite agreement of state government, state distribution company and RBI
  • Address the problem of fuel supply for thermal generation
  • The State Electricity Boards should prepare a shelf of detailed project reports (DPRs) for various hydro projects. DPRs should be of bankable quality and should be prepared after detailed investigations and based on dependable hydrological and geological data. The SEBs may also obtain environment clearance for these DPRs. Availability of DPRs would be able to attract greater investments and also reduce the construction time of hydro projects.
  • Since development of power assumes national importance, the Centre should set up a fund with a contribution of Rs. 1000 crore for preparation of good quality DPRs.
  • The Central and the State Governments' timely support in providing environment clearance, land acquisition, settling rehabilitation and resettlement of displaced persons is crucial for completing hydro projects on time.
  • Generation of electricity from renewable resources such as solar, wind, bio-mass, bio-gas, and municipal waste should be encouraged particularly by waiving off cross subsidy on power from such sources.
  • All efforts be made for capacity addition in the power sector from captive power plants.
  • The Central and State Governments need to give special focus to strengthening and enhancement of the power transmission system
  • The development of transmission lines up to the grid point should be the responsibility of a joint venture with PGCIL and the developer.
  • Make the Power Trading Corporation as a buyer of power at the load centre and then distribute to the users.
  • The government should promote bio-mass generation and local distribution at village level.
  • Ensuring functional and financial autonomy of the discoms.
  • Generation companies should be allowed to set up joint ventures for power distribution.
  • Create market for power and providing open access. There is need to create a functional market for power to help the emergence of new commercially viable power projects.

On the Issue of Water Resources the recommendations were:

  • Multi-purpose projects namely Tehri on tributary of river Ganga, Kishau, Renuka and Lakhwar-Vyasi on River Yamuna need to be expedited.
  • Adoption of flexible attitude and political will of the governments of the basins states to resolve all related issues in these projects to enable early execution of these projects would be in the overall interest of the region and the economy
  • All the clearances like techno-economic clearance and environment and forest clearance, which is in the purview of central government, should be accorded on a war footing
  • All the clearances like techno-economic clearance and environment and forest clearance, which are in the purview of central government, should be accorded on a war footing

The Task Force on eGovernance made specific recommendations in the area of administrative reforms are as follows-

  • Improving decision making process at the Secretariat, Heads of Department and District-levels using IT.
  • Monitoring of Flow of funds from the State budgets and the Centrally Sponsored Schemes to Implementing Agencies;
  • Reduction and if feasible elimination of challans and similar manual methods for receipts and payments through adoption of ECS (Electronic Clearing System).
  • IT enabled systems for the design, management and implementation of national flagship programmes such as NREGS (National Rural Employment Guarantee Scheme), BRGF (Backward Region Grant Fund), Bharat Nirman, SSA (Sarva Shiksha Abhiyan), NRHM (National Rural Health Mission) etc.
  • IT enabled system for award of Contracts, Tendering, and Procurement etc.
  • IT enabled Grievance redressal system.
  • Use of IT enabled systems for speedy disposal of civil and criminal cases.

In the area of Public Service delivery the following are the specific items upon which the recommendations were made:

  • Public Distribution System;
  • Land Records Management;
  • Birth, Death, Caste and Residence Certificates;
  • Driving Licences;
  • Identification and issue of cards to BPL families;
  • Market Information upon prices and availability of inputs for agriculturists and for sale of their produce.
  • Payment of old age, disability and widow pensions.
  • Road transportation using smart cards for effective movement of goods and Public & Private Transportation.
also see : PHDCCI moots Northern Indian common economic region

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Northern CMs to strengthen North Indian economy