The pre-Budget meeting which the Union Finance Minister Arun Jaitley and his team of officials had with the State Finance Ministers witnessed some tense moments with the West Bengal Finance Minister Amit Mitra walking out in protest against demonetisation.
“The forthcoming Budget is meaningless. Demonetisation has crippled the economy,” Mitra said.
Demonetisation and its impact on the economy was one of the key concerns of States. “I wanted the Finance Minister to hear the reality on the ground, the financial emergency in the country and the political environment of fear all around,” Mitra said.
Later speaking to reporters, Jaitley said it is essential to present the Union Budget on time to ensure that expenditure flow is maintained from the start of the fiscal. “These are the same parties which say there has been no positive effect of demonetisation. So why are they worried about the date of the Budget,” he said, adding that even in 2014 the Budget was presented before the polls.
Brushing off concerns over demonetisation, Jaitley said that States which have governed well have also earned well. “The States raised some issues and also made broad policy proposals. We have taken note of these and will be responding,” he added. Delhi Deputy Chief Minister Manish Sisodia said the Centre must compensate States for their revenue loss due to demonetisation. As a result of demonetisation, tax revenue under Value Added Tax has shown a negative growth in the month of December 2016, as compared to December 2015, he said.
Meanwhile, States, including Bihar, raised concerns over the award of the Seventh Pay Commission recommendations to Central government employees and said that it would be unable to foot similar salary hikes.