With more money available with the state governments following the implementation of 14th finance commission award, the central government has asked them to stick to the path of fiscal discipline.
Addressing the second meeting of the State Finance Secretaries in New Delhi on Monday, Finance Minister Arun Jaitley asked the states to spend more on development of infrastructure, social and rural sectors.
Jaitley said the public investment was main the main driver of growth and asked the state governments to ensure optimum utilisation of resources without leakages.
Jaitley said states’ share in Union taxes has substantially gone up after the implementation of the 14th Finance Commission report that prescribed a record ten per cent increase in their share to 42 per cent.
Speaking on the occasion, Minister of State for Finance Jayant Sinha said, the Centre and the States have to work in complete cooperation to achieve the goal of common good and ensure that benefits of various schemes reach to the last man.
Jayant Sinha asked the State Governments to use the Direct Benefit Scheme (DBT) and JAM Trinity – Jan dhan, mobile,Aadhar vehicle to ensure that the benefits of various schemes reach to the last man without delay and any pilferage.
Finance Secretary Ratan P Watal said the central government was required to meet its financial commitments laid down in Budget and at the same time remain on the path of fiscal consolidation.
Finance Secretary said union government was able to meet the fiscal deficit target of 3.9% of GDP without enforcing budgetary cuts on the Plan Expenditure side.
The Central Assistance for State and UT plans were enhanced from Rs.2,04,784 crore to Rs.2,16,108 crore at 2015-16 (RE). This may probably be the first time in recent past that allocations under the CASP head were enhanced at RE Stage.
Finance Secretary said though there are challenges in terms of implications arising out of 7th Pay Commission and OROP, emphasis of the Central Government has been on ensuring macro-economic stability and prudent fiscal management. Towards this end, the Centre is committed to remain within the mandated Fiscal deficit target of 3.5% for 2016-17.