The 12th Finance Commission on Monday held a meeting with leading economists and economic administrators in Chennai to elicit their views on current issues concerning inter-governmental resource transfers.
A main issue discussed at the meeting chaired by the commission chairman C Rangarajan was the implications of the introduction of VAT.
Other issues that came up during the meeting were the criteria for sharing of resources between the Centre and the states, implications of the gap filling approach for giving grants-in-aid and the criteria for determining transfer of resources to local bodies.
Speaking at the meeting, the commission chairman said the task of the commission was to correct fiscal disadvantage while discouraging fiscal imprudence, adding that equity and efficiency will have to be combined within a framework of fiscal prudence.
The commission would be holding similar meetings in Mumbai and Kolkata shortly.