States tell FM to cut Centre-sponsored schemes

New Delhi: Finance Minister Pranab Mukherjee today underlined the need for striking a balance between fiscal consolidation and public expenditure, even as states stepped up their demand for more funds to achieve

inclusive growth.

"As the country enters the 12th Plan period in 2012-13, there is a need to balance the need for higher government expenditure for supporting improved and inclusive growth and the imperative of fiscal prudence," he said during a pre-budget consultations with state finance ministers.

At present, he said, "we are facing three major challenges -- maintenance of inflation, especially the food inflation, at reasonable level, bringing the economy back on the path of fiscal consolidation and maintaining sustainable and inclusive growth".

Mukherjee sought the support of states to meet various challenges facing the economy and emphasised that the country can meet those with mutual cooperation and support of each other.

He also underlined the need for greater coordination between Centre and states vital for creating a conducive environment for growth and inclusive development.

During the meeting, a number of suggestions were given on the Union Budget for 2012-13.

They demanded that government should focus on growth in rural areas and provide more resources and facilities in education and health sector.

Some members suggested that the government should implement the B K Chaturvedi Committee report pertaining to reduction in the number of centrally sponsored schemes.

Talking to reporters after the meeting, Bihar Deputy Chief Minister, who also holds the finance portfolio, Sushil Kumar Modi said a large number of states have agreed that BK Chaturvedi group report on central sponsored scheme (CSS) should be implemented and the report has suggested to reduce 147 CSS to 59.