SHAH ALAM: The federal government should provide grants to the Selangor state government that is in accordance to the provision of the Federal Constitution, said Selangor Menteri Besar Tan Sri Khalid Ibrahim.

He said the state government was facing undue financial constraints as the federal grant it received did not reflect its income contribution of RM16 billion.

The Selangor government received 16.6% of its Budget 2009 from the federal allocation, significantly lower than the 21.65% it received for Budget 2008.

He said that had affected the state’s efficiency and proposed development agenda.

“If 20% of the RM16 billion were to be given back to the state, state spending would be double what we have now,” he said.

Khalid said the federal government was obliged to provide capitation grant and grant for maintenance of state roads in accordance with the Federal Constitution but this principle was not adhered to.

He said grants should be based on need and not be part of a “political game”.

“Our country would not be able to succeed if we always place politics first and state interest last,” he said.

Citing China and Indonesia as examples of how fiscal decentralisation has been carried out by transferring federal power to the local government, Khalid said: “Greater decentralisation should be practised in Malaysia in order to achieve a comprehensive development.”

“The equalisation formula should be used by taking into consideration the state’s population, poverty level, development of districts and the index of gross revenue per capita income,” he added.

In order for the country to become a mature democracy, the state government proposed to establish an Independent Grants Commissions as practised in countries like Canada and Australia, Khalid told reporters after the launch of the third phase of Bar Council's MyConstitution Campaign.

The Selangor government is the Bar Council's partner for the campaign third phase which focuses on federal-state relations.