The Fifteenth Finance Commission of the Government of India is visiting the state of Gujarat from 22nd to 25th July 2018. The Commission led by the Chairman ShriN.K.Singh, Members – ShriShaktikanta Das, Dr. Anoop Singh, Dr. Ashok Lahiri, Dr. Ramesh Chand and Secretary Shri Arvind Mehta along with other officials will have meetings with Chief Minister, Ministers and other officials of the state. Detailed presentations will be made on the finances of the State Government. Ahead of the visit, Commission understood in New Delhi, various aspects of its finances and issues related to socio-economic spheres from Accountant General of Gujarat.

Apart from the meetings and presentations, State govt. will also showcase its flagship programmes to the Commission. Commission will pay its homage to Mahatma Gandhi at Gandhi Ashram on 24th July. During the field visits same day, Commission will visit SardarSarovar Dam, Statue of Unity and GIFT City. On 25th July, it will visitRajkot to see Aji-I reservoir, SAUNI Yojana Phase 2 and Integrated Command & Control Center (ICCC) under Smart City Project.

The Commission will also meet leaders of various political parties, Representatives of Trade and Industry. There will also be an interactive session with Urban Local Bodies and Panchayati Raj Institutions to understand the status of the devolution (funds, functions and functionary) to the third tier and outstanding issues related to the State Finance Commission.

Background

Gujarat has been one of the best performing states and has made significant progress in various macro-economic parameters in last decade or so. State GSDP growth rate has been higher than GDP growth of India since 2012-13 and it has been able to generate revenue surplus continuously since 2011-12. The capital expenditure increased continuously from ₹ 21,227 crore in 2012-13 to ₹ 24,169 crore in 2015-16, but decreased to ₹ 22,355 crorein 2016-17. State’s own tax revenue has   increased continuously over the period 2012-17. State’s non-tax revenue has shown an increasing trend during the five year period 2013-17. State’s total outstanding debt as percentage of GSDP was 21.57 per cent in 2015-16 which was within the target of 25.91 per cent fixed by the 14thFinance Commission.

Notwithstanding, capital expenditure needs to keep pace to maintain the growth momentum. Gujarat has witnessed moderate growth in GST collections in the first year of its implementation. Commission will try to understand the efforts undertaken by States to improve GST collections. Gujarat is a Power surplus state with installed capacity of 27057 MW in 2016-17 against normal peak demand of 15203 MW. It has achieved reduction in T&D losses from 23.60 % in 2012-13 to 18% during 2016-17. 99.89% electrification of all villages has been achieved by March 2017.

Poverty reduction in Gujarat has been faster than the national average. Gujarat is home to 60 million people, of whom one-sixth are poor. Despite performing fiscally well, Gujarat needs to catch up with the national average in Full Immunization, Sex-Ratio and Child Nutrition. Its IMR, MMR, TFR, Life expectancy at Birth, Literacy rate and per capita income are better than national average. State govt. has also submitted a detailed memorandum to the Commission for consideration.

15thFinance Commission till now has made significant progress in understanding the needs of Union government and various state governments through numerous meetings and state visits. Gujarat is the sixth state to be visited by the Commission followed by Jharkhand. Commission expects to gain an in-depth understanding of the recent developments and future possibilities of economic growth and development in Gujarat during its interactions and meetings with the state govt.

Finance Commission visit to assess state finances and devolution, informing recommendations on fiscal transfers and local governance. The Fifteenth Finance Commission will visit Gujarat to assess the State's public finances and decentralisation arrangements through meetings with state leadership and officials, detailed presentations and a state memorandum, interactive sessions with Urban Local Bodies and Panchayati Raj Institutions to examine devolution issues, and field visits to major infrastructure projects. The Commission will analyse fiscal metrics-revenue surplus, own tax and non tax revenue trends, capital expenditure, debt to GSDP-and sectoral outcomes including GST mobilisation and power sector performance to inform its recommendations.