10 SOCIAL SCIENTIST
Finally, a substantial part of the outstanding State debt to the Centre may be written off. Poorer States may be given greater relief. The rest of the loans should be rescheduled on easier terms. States should have access to foreign exchange to the extent of the foreign exchange component of their Plans. The N D C should have an important say in respect of external borrowing. Market borrowing should be equally accessibile to the States as well as to the Centre. States could also borrow from the financial institutions and commercial banks. They may even be allowed to develop deposit banking of their own. Some of these changes would call for suitable amendments to the Contsitution and fiscal practices.
1 Saikar Committee v\as a s^ub-committee of the Consembly constituted in 1948 to delimit the financial powers of the Provinces.
2 K. Santhanam, Federal Financial Relations in India, Bombay, Forum of Free Enterprise, 1966.
3 P V Rajamannar, Report of the Centre-State Relations Inquiry Committee, 1971.
4 Adm'nistiative Reforms Commission, Report of the Study Team on Centre-State Relationship, Delhi, 1968. volume 3 (Chairman, M C Setalvad).
5 Report of the Taxation Enquiry Committee, Government of Kerala, 1969, ch. 1.
6 The tax was repealed with effect from April 1, 1961. The amount made over to the States was pegged to Rs. 12.5 crores until 1966 since when it has been raised to Rs. 16.25 crores.
7 • Report of the Taxation Enquiry Committee, op cits ch. 2.
8 Report of the Indirect Taxes Enquiry Committee, 1978. The State governments were not consulted before defining the terms of reference of this Commitee as required under Article 274 of the Constitution.
9 Sixth Amendment of 1956 which modified Article 386 (3) of the Constitution.
10 MJKThavaraj Financial Management of Government, Sultan Chand and Sons. Delhi, 1978, ch. 4, Table VIII.
11 Ibid, Table IX.
12 Ibid, pp 137-139.