Kelkar said the fiscal projects presented by the state for the period 20010-15 prima facie indicate a worsening in the state's fiscal management.

Kelkar also voiced concern over intra-state disparities in income. 'The per capita income of the poorest districts is less than half of the richest district. There are also wide variations in literacy rates and in per capita availability of education and health facilities,' he said and wanted to know from the government the time frame within which these disparities will be addressed.

Referring to Goods and Services Tax (GST) coming into effect from April 1, 2010, the finance commission chairman said this was necessary if Indian industry was to survive in this age of globalisation.

Reacting to the chief minister's request for compensating states for possible loss of revenues in first few years after migration to GST, Kelkar said the commission would explore how it could encourage a grand bargain between the centre and the states.