Mumbai, Feb 9 (PTI) Union Commerce Minister Piyush Goyal has said the demand by some states that they get central funds in proportion to their contribution of taxes to the central kitty is "petty thinking" and "unfortunate".

Prime Minister Narendra Modi is of the view that if the country is to prosper, the eight states of the Northeast and eastern Indian states like Bihar, West Bengal, Odisha and Jharkhand must develop, Goyal said on Saturday.

The BJP leader was speaking at the 'Rashtriya Ekatmata Yatra 2025', an event organised here by the Akhil Bharatiya Vidyarthi Parishad (ABVP) and the 'Students Experience in Inter-State Living (SEIL)' initiative.

In the last 11 years, the Modi government's "laser focus", like that of Arjuna of the Mahabharata, was on the Northeast and eastern states, the minister said.

"It is unfortunate that some states and some leaders...I don't want to politicise it but some leaders from Maharashtra used to say...leaders of the earlier government which was there for two-and-a-half years, they used to calculate the tax paid by Mumbai and Maharashtra and (demand) it should get back that much amount (of central funds)," Goyal said.

The parliamentarian from Mumbai North was apparently referring to the previous Uddhav Thackeray-led Maha Vikas Aghadi government.

"There are some states like Karnataka, Tamil Nadu, Telangana which say they should get back the amount of taxes they have paid. There can't be any (greater) petty thinking (chhoti soch) than this. There cannot be anything (more) unfortunate than this," he said.

But there is no need to worry now as the present BJP-led government in Maharashtra is very sensitive towards Northeast India, the minister added.

The Modi government at the Centre, for the last 11 years, has been following "Act East" and "Look East" policy, prioritising Northeast India, said Goyal.

Under the Modi government, the capitals of the northeastern states are being connected by railway and a network of highways is being built, he said.

PM Modi has visited the Northeast more than 65 times, he noted, and urged the people to visit the region at least once to see its beauty and culture. PTI PR KRK GK

Fiscal federalism: demands for central funds tied to tax contribution criticised as short-sighted; emphasis on equitable regional development. The minister criticised state demands that central transfers be proportional to taxes paid as 'petty thinking,' rejecting a reciprocity based formula for fiscal allocation and framing central funding as guided by development and equity priorities, with specific emphasis on infrastructure and policy focus for the Northeast and eastern states under Act East/Look East.