Thursday, September 28 2006 14:20 Hrs (IST) - World Time -

Chandigarh: Prime Minister Manmohan Singh today (Sept 28, 2006) bluntly told chief ministers of northern states that hindrances they were putting up in the form of disproportionate taxes and not allowing free movement of goods would not help the states in the long run.

Inaugurating the conclave of chief ministers of northern states here, the prime minister pointed out that at a time when trade barriers were being removed globally, Indian states were imposing taxes and other trade barriers among themselves.

"We have fragmented our internal market. Taxes imposed by states are becoming a hindrance in our development," he regretted.

He said he was well aware of the development concerns of individual states due to which they imposed taxes and put up other trade barriers to generate more revenue.

He suggested that instead of competing with one another, states should work towards a common economy.

Manmohan Singh, who himself grew up in Amritsar, said that northern states lagged behind the western Indian states on many parameters. The human development index and revenue earning of the western states was much more than the northern states, he said.

"If our present rate of growth at eight percent is sustained, Punjab will become a Germany by 2020 while Uttar Pradesh will become like Punjab in development. But for that to happen, the states must correct inter-regional imbalances," he said.

The chief ministers of Punjab (Amarinder Singh), Haryana (Bhupinder Singh Hooda), Jammu and Kashmir (Ghulam Nabi Azad), Himachal Pradesh (Virbhadra Singh), Delhi (Sheila Dikshit) and Chandigarh's administrator and Punjab governor S.F. Rodrigues were present at the conclave, being organized by the PHD Chamber of Commerce and Industry.

The chief ministers will deliberate Thursday on various common issues.