State FMs to nominate next GST panel chief

The Centre might have little say in nominating the next chairman of the Empowered Committee of State Finance Ministers (EC).

Recently, Bihar Deputy Chief Minister Sushil Modi refused his nomination as EC head by Finance Minister Pranab Mukherjee.

Officials said Mukherjee had proposed the name of Modi for the post, as an experienced person like him could have helped convince BJP-ruled states to move ahead on the Goods & Services Tax (GST).

Following the recent poll debacle in West Bengal, former state finance minister Asim Dasgupta, who headed the committee, had to vacate the post.

The final decision on the next EC chairman will now be taken by the general body - comprising state finance ministers, a member-secretary and one additional secretary from the Union finance ministry - of the committee.

The Union finance ministry does not have a dominant role in the appointment of the chiarman unlike during the time of the NDA regime, because it has only one representative in the body that selects the chairman.

On the other hand, Dasgupta, the first head of the EC, was appointed by the then finance minister Yashwant Sinha. The post of EC chairman is likely to be finalised through a consensus among the panel members.

"The process of selecting the chairman would be different because EC is now a registered society, whereas when Dasgupta was appointed it was just a panel for monitoring implementation of Value Added Tax. Initially, Dasgupta was the convener of the committee," said a finance ministry official.

At present, there are no set rules to elect the chairman of the committee, but in case

there is an election between two or more candidates the general body might have to define the rules, said another official.

The finance ministry, however, does not expect a split among the members on selecting the chairman, as "it is a huge responsibility and no state finance minister would like to fight for the post".

The implementation of GST has already missed two deadlines because of differences among the Centre and the states. The new deadline for introducing GST is April 1, 2012.

However, the process could be derailed because BJP-ruled states and Uttar Pradesh still have some differences with the Centre.

Maharashtra Finance Minister Sunil Tatkare and Delhi Finance Minister A K Walia could be considered if Modi is not available.

The newly-appointed finance minister of West Bengal, Amit Mitra, is not likely to be considered, as the search is on for a candidate active in the meetings of the committee, who provides continuity and leadership, and has good experience as a state finance minister.

The EC was constituted by the Union finance ministry in July 2000 on the basis of a resolution adopted in the conference of the chief ministers.

Initially, state finance ministers of West Bengal, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Uttar Pradesh, Gujarat, Delhi and Meghalaya were its members.

Later, Assam, Tamil Nadu, Jammu & Kashmir, Jharkhand and Rajasthan were also notified as members. In August 2004, the Centre had decided to reconstitute the EC with all state finance ministers as members.

The EC has a separate office in New Delhi after it was registered under the Societies Registration Act and receives contributions from the Delhi Government and the Centre to meet its administrative expenditure.