Tamil Nadu Chief Minister J.Jayalalithaa on Saturday said co-operative federalism may "degenerate into empty rhetoric" if the states are not given "adequate powers and fiscal resources".Citing the National Democratic Alliance (NDA) government's pledge to promote co-operative federalism, Jayalalithaa, welcoming the change of emphasis, also said: "Co-operative federalism should not become a catchword to impose uniform administrative practices across the country without due regard to the specificities of the socio-economic situation in each state," as per her speech circulated at the Inter-State Council meeting.While Jayalalithaa did not attend the meeting, Tamil Nadu Finance Minister O.Panneerselvam represented the state and copies of her speech were distributed.
Jayalalithaa said Justice M.M.Punchhi Commission's recommendations on restrained use of the Union's legislative powers on the subjects in the concurrent list deserve to be fully supported, and this an opportune moment to consider returning the subject of 'Education' to the state list and move 'Environment, Ecology and Climate Change' to the concurrent list.Expressing concern that the central government through the Centre State Investment Agreement (CSIA) is trying to pass on some of the financial burden it may suffer from adverse arbitration awards under existing Bilateral Investment Protection Agreements (BIPAs) or Bilateral Investment Treaties (BIT), she said: "States were not party to such agreements and are not even aware of the contents of such agreements. To make States liable now under the CSIA mechanism for bilateral agreements entered into earlier is unfair."
Referring to the draft CSIA that permits deduction of any dues from the state governments from the central government transfers, she said that this is unacceptable as bulk of these are based on Finance Commission recommendations.According to Jayalalithaa, there need be no change in the current legal position on Governor going by the advice of the Cabinet while granting sanction of prosecution against a Minister.Castigating the NDA government of guilty of indiscriminate resort to levy of cesses and surcharges, she said the trend has to be reversed and the cesses and surcharges imposed must be added back to the base taxes and made shareable with the states at least in the next fiscal year.
She said certain recommendations of the Punchhi Commission with regard to the Goods and Services Tax (GST) support Tamil Nadu's stance relating to revenue neutrality, and assurance of providing 100 per cent compensation to states for revenue loss.Noting that while state level parties and leaders are not far more significant players, she said there is a steady shift in real political and economic power away from the central government."These should not be seen as centrifugal or fissiparous trends that have to be curbed, but as a manifestation of India's maturing as a nation with diversity and as a democracy," Jayalalithaa said.