The Gujarat government on Monday sought a special compensation to the tune of Rs 9000 crore, which the State had lost owing to prohibition in the State. The demand was placed before the 15th Finance Commission, which was on a three-day visit to the State.
In its presentation before the Finance Commission Chairman and NK Singh and other members, the State Government had stressed that the State had lost approximately ₹9864 crore per year in excise owing to the prohibition policy.
“We have brought it to the notice of the Finance Commission that the state loses considerable amount and that should be factored in,” Gujarat Chief Secretary Dr J N Singh told The Hindu.
Earlier during the presentation, Chief Minister Vijay Rupani had urged the commission to encourage the policy of prohibition as adopted by the State by giving some incentive considering its positive externalities and social benefits.
“The prohibition as a policy offers social benefits in terms of better law and order,” a State official said.
The State had also demanded a special grant on the ground that it was a border State, shared land and sea border with Pakistan. The State wants special grant for infrastructure development in the border districts Kutch, Banaskantha and Patan.
The commission chairman Mr Singh praised Gujarat’s rapid progress on industrial development and also noted increasing expenditure on health and education, both human development sectors in which the State was found to be lagging behind.
“Recently, Gujarat is improving its expenditure in health and education – areas which deserve fuller attention over the coming years,” Mr Singh said while talking to media persons after meeting Mr. Vijay Rupani, Deputy CM and Finance Minister Nitin Patel and top officials including Dr J.N Singh.
While lauding the Gujarat government’s efforts in pushing economic growth in the State, the commission also underlinedthat the Goods and Services Tax (GST) would be a primary challenge in coming years.
“One of big challenges Gujarat is facing is GST collections. Once the 14% guarantee as GST compensation by the Centre winds up, Gujarat will need to look at the GST collection projections seriously and tax buoyancy may become an issue,” Mr Singh added.