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Jaya concerned about fiscal health
of states

In a letter to the prime minister, Jayalalithaa said most of the state governments were compelled to apply the Fifth Pay Commission scales to their employees following to the Centre's decision to implement it. This had resulted in an "unbearable strain" on the finances of the state governments.

Besides, the "sharp" decline in collection of central taxes in the current fiscal had resulted in a corresponding reduction in the share of the states, she said.

The declining fiscal health of many state governments could not only derail the economic and fiscal reforms being pursued by the Centre, but also prevent the state governments from meeting even the basic needs of people, she said.

Jayalalithaa also urged the prime minister to sanction a minimum of Rs 3,000 crore [Rs30 billion] to Tamil Nadu to tide over the present crisis.

She said the Centre's economic and fiscal reforms programme required active participation by the states.

"We realise there is some gain if the targets of the reforms are achieved soon and with minimal impact on the poor. But a lot will be lost if the state governments fail to keep pace with the reforms process," she add.

On the situation in Tamil Nadu, she said the ratio of unemployed to the rural population was one of the highest in the country and the percentage of people around the poverty line was still very high.

PTI

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