15th Finance Commission discusses range of issues with the state of Maharashtra

15th Finance Commission discusses range of issues with the state of Maharashtra

15th Finance Commission

Political parties demand special city development grant for Mumbai
Competitiveness of Indian exporters would improve due to rupee depreciation: industry representatives

Posted On: 18 SEP 2018 8:43PM by PIB Mumbai

On the first day of its deliberations with the state of Maharashtra, the 15th Finance Commission headed by Shri N.K.Singh met representatives of major political parties, trade and industry and local bodies. Also present were the Commission’s members, Dr. Ashok Lahiri, Shri Shaktikanta Das, Dr. Anoop Singh, and Dr. Ramesh Chand.


Political parties expressed concern that Maharashtra has been deprived of tax devolution on the pretext that the state has the highest GSDP and that successive commissions ignored the challenges of regional inequality within the state. It was further demanded that as Maharashtra has maintained the population replacement rate of 1.8, it should be incentivized for the same.

They added that the city of Mumbai has been the growth magnet of the country and that the resultant in-migration put enormous stress on resources and infrastructure. While the state takes pride that people of all states in the country live in the city, they demanded that the Commission shall recommend ₹50,000 crore as a special grant for city development. Secondly, while population is a critical indicator for devolution, due weightage for  in-migration shall be provided. Besides, they also pleaded for adequate revenue deficit grant. They highlighted that the Commission has to pay due attention to farm crisis and drought in the state.

The Commission consulted members of FICCI, Maharashtra Chambers of Commerce, Industries and Agriculture and Indian Merchants Chamber. They informed about the shortage of equity and credit being faced by the industry. They requested that GST on services used by Centre and State may be borne by respective governments so that the MSMEs are spared the burden of frequent taxation. They also opined that the competitiveness of Indian exporters would improve due to the rupee depreciation  within a range of Rs. 72-73 per USD. They also said that the domino effect of insolvency and NCLT is faced by the MSMEs and hence requested for relaxation in rules of the Insolvency act.

During the interaction with the representatives of rural and urban local bodies, a range of issues was raised, including the need to devolve funds to Zilla and Taluk Panchayats besides village panchayats for maintenance of community assets, capacity building, raising of internal resources and cluster-based approach for effective delivery of services such as solid waste management. Representatives from Konkan region sought special grants for dealing with cleanliness and beautification of sea shores, arresting saline water ingression while hill areas like Panchgani impressed on the grants to provide services to tourist population and performance based incentives.