Centre should stop legislating State subjects: Palanivel Thiaga Rajan

Tamil Nadu Finance Minister Palanivel Thiaga Rajan on Friday suggested measures, like ending the practice of the Union government legislating on State subjects, to strengthen cooperative federalism.

He was delivering the 15th V. Sankar Aiyar Memorial Lecture on ‘The Future of Cooperative Federalism’, organised by the Southern India Regional Council of the Institute of Chartered Accountants of India. He said the Centre should also stop mandating “one size fits all schemes” for the States. To drive home his point, he cited the example of the National Food Security Act. It did not benefit Tamil Nadu much because the State was running a superior programme, he said.

Vibrant debate

Mr. Thiaga Rajan called for revival of the notion of Council of States to ensure a vibrant debate on policies. He felt that the GST required profound reforms — everything, from the voting pattern at the GST Council to procedural aspects, should be reconsidered. He also called for meaningful devolution of funds from the perspective of the Centre to the States and from the States to the local bodies. The States need some power for levying direct taxes and there should be greater transfer of power to the local bodies from the States. “The Sixth State Finance Commission has submitted its report. Some of the aspects we are looking at are giving financial incentives to the local bodies and direct transfer of funds to the local bodies. Currently, the funds are transferred to the respective State government department which gives them to the local bodies,” he said.

Mr. Thiaga Rajan also expressed concern over the weakening of the judiciary and other institutions. A coalition government has ensured better results in job creation, economic growth and other parameters, he said. Yamini Aiyar, granddaughter of V. Sankar Aiyar, explained the significance of the lecture. Former Union Minister Mani Shankar Aiyar, the eldest son of V. Sankar Aiyar, spoke.