In an informal chat with reporters here on Tuesday, Finance Minister Vajubhai Vala said the government was forced to take this decision following Union Finance Minister Yashwant Sinha's refusal to entertain Gujarat's request that the centre should share the state's financial burden.

Faced with the heavy liability, the state government has already decided to deposit 50 per cent of the arrears in the general provident fund (GPF) accounts of the employees. The remaining 50 per cent would be paid to the employees in two installments.

The decision to give the employees benefits recommended by the Fifth Pay Commission was taken by the previous RJP government, headed by Dilip Parikh. It had also requested the centre to provide financial assistance to the state for this purpose.

Vala said the centre should provide a 75 per cent share to the state from the collection of Rs 3,400 crore made in Gujarat under the Voluntary Disclosure of Income Scheme. According to the formula laid down by the centre, the state's share would be only about Rs 375 crore, he said.

As part of its efforts to improve tax recovery, the government would increase the checking on the state's borders. For checking tax evasion by bogus billing, it would start maintaining registers of parties bringing goods from the Union Territories of Diu and Daman, and Dadra and Nagar Haveli, the minister said.

Vala, who also holds the charge of revenue, alleged that former RJP Co-operation Minister Vithalbhai Radadiya had purchased 1,500 square metres of land at an exorbitant rate of Rs 30,000 per square metre for the Rajkot District Co-operative Bank in his capacity as its chairman, although the market rate was only about Rs 10,000 per square metre. Alleging that Radadiya had done this to benefit the land owner, Vala said the government proposed to conduct an inquire into the matter.