AGARTALA, December 8 (TIWN): " The Union Govt should devolve 50% of its total revenue collections to the states to enable them to meet their burgeoning fiscal needs, said Chief Minister Manik Sarkar while interacting with the media persons at Civil Secretariat here this evening.North Eastern states are economically under-developed with little fiscal resources of their own. Their capacity to generate plan resources becomes even more restricted because of the finance commission’s not recognizing that even though the North Eastern states are small states, they too have to maintain a minimum size of the administrative machinery, and hence to devote their meager resources towards this end (which the finance commission does not compensate them for). The new planning commission must have a specific mandate to address the resource gap for state plans in the North-East", Manik mentioned. Tripura CM agreed with Modi's plans to replace Planning Commission with a new body but demanded more share of revenues to States.

"The planning commission cannot be merely a “think tank”. It has to plan the volume, sectoral distribution and private-public split of infrastructural investment. Leaving infrastructural investment to public-private partnerships in which the public sector provides the resources and carries the risks, while the private sector earns the bulk of the returns, will undermine the government’s fiscal position, and hence thwart the prospects of essential public investment being undertaken. Secondly, it has to plan public investment as a whole and recommend appropriate ways of garnering fiscal resources and of restructuring the public sector. Mere disinvestment and privatization of public sector units, apart from breeding corruption, are socially counter-productive, and even fiscally suboptimal. Thirdly, it has to provide some set of indicative targets on how the structure of the economy as a whole and the individual sectors and subsectors should evolve", CM added.   

The growth in regional disparity in the country has been quite striking, with the North-East lagging behind the rest of the country. This has to be combated. For doing so, however, relying on private investment alone is grossly inadequate. Public investment becomes a crucial instrument for combating regional inequality. The new planning commission has to play the role of consciously directing public investment towards the backward regions, including in particular the North-East, he said.

It is to be mentioned here that, Prime Minister Narendra Modi's call for replacing the Planning Commission with a suitable institution found support from most chief ministers on Sunday, but those from Congress-ruled states and West Bengal wanted any changes should be made within the existing framework. Sources said that the new body could comprise of the prime minister, some senior cabinet ministers, a few chief ministers on a rotational basis and some experts. The meeting was held at the Prime Minister's official 7, Race Course Residence, was followed by a first-of-its-kind "retreat" where the chief ministers discussed innovative practices. West Bengal Chief Minister Mamata Banerjee skipped the meeting.

Tripura CM agreed with Modi's plans and suggested  in his speech (at page 7) that " The new body may suggest measures through which this will be achieved and also suggest the allocation of resources at this end. Further new body has to formulate policies for appropriate allocation of resources". 

Left ruled Tripura's CM Manik Sarkar started aligning himself to Modi since few months to save his Govt. from possible CBI investigation on hundreds of crores embezzlement in multiple scams involving his close associates like BDO Bimal Chakraborty and party leaders.

In his opening remarks, Modi said states should have key role in the new body that replaces the commission and there should be an effective mechanism to address inter-state disputes. 

He said relevance of the poll panel has been repeatedly questioned for more than two decades and policy planning should be "bottom to top" instead of the other way round.

"Can we develop a new mechanism, that plans according to India's strengths, empowers states, and brings on board all economic activity, including that which happens outside the government," he asked.

Modi said Team India comprised of three teams - the prime minister and chief ministers, union council of ministers, and the bureaucracy at the centre and states. 

Referring to the role of think tanks in countries like the US, Modi said there was need to devise policies for "a great deal of economic activity" that takes place outside the government.

"Time has come to develop a new mechanism to deliver growth and development," he said and referred to his own experience as Gujarat chief minister.

Modi said his predecessor Manmohan Singh, in his remarks at a meeting of plan panel earlier this year, had noted that the body has "no futuristic vision in post-reform period".

Briefing reporters after the meeting, Finance Minister Arun Jaitley said that most chief ministers favoured replacing the commission with an alternative structure which has representation from the central government and the states and expert participation also.