New Delhi: Pitching for higher flow of funds from the Centre to the states, Tamil Nadu on Sunday demanded flexibility in the design of the flagship programmes and limiting the state's share to 25 per cent for such schemes.
In his presentation at the first meeting of the Governing Council of NITI Aayog here, State Chief Minister O Panneerselvam said vertical devolution of share to the states should be at least 50 per cent of the aggregate resources available with the Centre.
"We believe that the non-transparent, discretionary and uncertain fashion in which funds were allocated and disbursed to States by the erstwhile Planning Commission and by different Central Ministries under various centrally sponsored schemes must be comprehensively overhauled," he said at the meeting chaired by Prime Minister Narendra Modi here.
Seeking elimination of the distinction between plan and non-plan expenditure, he said increased fund flow would be feasible if other mechanisms of flow including plan assistance and centrally sponsored schemes were eliminated or greatly minimised.
Currently, transfers to States as Plan Assistance accounts for 15 per cent of central expenditure and 44 per cent of what States receive as central transfers, he said.
Stressing on substantial flexibility in the design of the flagship programmes to cater to the diverse needs and the capacity differentials amongst states, he said "the States' share should be limited to a maximum of 25 per cent of the scheme cost in order to ensure that the States' own expenditure priorities are not distorted."
Guidelines must allow states to dovetail central scheme funds with state funds where there is a similar state scheme and actual release of funds should adhere to the promised allocations without arbitrary mid-year reductions, he said.
Welcoming the inclusion of state Chief Ministers in the governing council of NITI Aayog, the Chief Minister said the views of the States need to be heard at different levels in the hierarchy of the Aayog.
Pannerselvam demanded that funds under the Direct Benefit Transfer scheme should be routed through state governments for efficient delivery.
"Tamil Nadu also strongly urges the Government of India to effect transfer of cash to the bank accounts of the beneficiaries only through the State Governments.
"This would be an administratively sound practice, given the complexities in different schemes and varying Central and State Shares, and in keeping with the spirit of federalism which forms the backdrop to these discussions, he said.
Alluding to some of the policies hampering investment climate in the state including the closure of one of the largest mobile handset manufacturing plant there, he said "policy corrections in this area are vital for the 'Make in India' campaign to have meaning".
Turning his attention to the interlinking of rivers, the Chief Minister reiterated Tamil Nadu's demand for interlinking of the Mahanadhi-Godavari-Krishna-Pennar-Palar-Cauvery and then on to Gundar and diversion of waters of the west flowing rivers of Pamba and Achankovil to Vaippar in Tamil Nadu under the Peninsular Rivers Development Component.
"Given the challenges of social and economic development in India, there is a strong case for the NITI Aayog to prepare a blue print for action with clearly laid down goals and objectives to be achieved within a given time-frame.
"The body should address the basic issues that confront the economy and how to resolve them, securing the consensus of both the Centre and the States," Panneerselvam said.
NITI Aayog should create sectorwise strategic vision documents to provide a longer term perspective of where the nation aspired to be in that particular sector, he added.