Addressing the pre-budget consultative meeting of state Finance Ministers, he also underlined the need to break the vicious cycle of high inflation and high interest rates. "Mandate of 2014 clearly spells out that economic growth cannot be compromised at any cost and is sine qua non to reap the benefits of the demographic dividend," he said, adding that there is a need to "round off corners" towards GST implementation.
Finance Minister of several states demanded that the Centre address issues pertaining to compensation on account of revenue loss following roll-out of GST, which is being touted as the most significant indirect tax reform. Talking to reporters after the meeting, Gujarat Finance Minister Saurabh Patel said: "Most of the states have said that employment and infrastructure should be given priority and how to increase revenue of the states."
Jaitley during his address to state FMs said: "States must complement each other in managing the economy and fiscal policy, which is the essence of cooperative federalism. In doing so (we) must act like a team." He said that while aiming for high growth, fiscal discipline should not be compromised, he added.
He also emphasised the need for states to address supply side bottlenecks to manage inflation. Retail inflation has touched a three-year high of 8.59 per cent in April, and the WPI inflation was 5.7 per cent.