Tamil Nadu Chief Minister Edappadi K Palaniswami at the NITI Aayog governing council meeting on Sunday urged the Centre to allow state governments to collect income tax. The chief minister said his suggestion would help states implement development programmes more efficiently.

Palaniswami said the system of allowing states to collect personal income tax was being implemented successfully in developed countries. “The power of collection and appropriation of personal income tax can be vested with the states as this would take care of growing needs of the states to implement development programmes,” he said.

Palaniswami said his proposal would simplify the complicated devolution of resources.

Palaniswami also demanded that the Cauvery Water Management Authority and the Cauvery Water Regulation Committee be immediately made operational in adherence with the Cauvery Water Disputes Tribunal’s order. “The Government of India should take lead in inter-linking of rivers by nationalisation of all the inter-state rivers which alone offers the promise of creating a framework that would allow optimal utilisation of water resources amongst states,” he said.

The chief minister said Tamil Nadu had suffered an annual resource loss of Rs 6,000 crore after the 14th Finance Commission. He said the 15th Finance Commission would also harm the state, unless some Terms of Reference are corrected.

“Some of them are not in line with the principles of federalism enshrined in our Constitution and have to be reconsidered,” Palaniswami said.

The Cauvery water dispute

On June 1, the Centre had notified the formation of the Cauvery Water Management Authority in compliance with a Supreme Court order on the water dispute involving Kerala, Karnataka, Tamil Nadu and Puducherry.

The dispute over Cauvery water has continued for more than 20 years now, and has worsened in recent years as farmers have been badly affected by lack of rainfall and drought in both states.