According to Finance Ministry sources, the conference can be seen as a prelude to kick-starting the second generation of reforms where states have to be involved in a major way. In fact, Finance Minister Yashwant Sinha had told a Federation of Indian Chambers of Commerce and Industry seminar recently that non-involvement of states in the first phase of reforms was a big mistake and the Government will try to rectify that this time. Other important issues which will be on the agenda of the conference will be rationalisation of sales tax, introduction of VAT, rationalising stamp duty, introduction of professional tax, levying ofentry tax in lieu of octroi duty, raising agricultural tariff, disinvesting in state public sector units and downsizing the Government, etc.

Interestingly, the CM's conference will be taking place at a time when Punjab has defaulted on the terms and conditions of a Memorandum of Understanding with the central Government wherein it promised to bring about reforms in lieu of fiscal help from the latter. The sources said that, therefore, the whole issue of such MoUs which were signed with eight more states, will also be taken up with the Centre stating it clearly that if the states are ready to undertake reforms it will help them in various ways.

In fact, the present MoUs were devised by the Centre after the states had complained to it that they were facing acute financial crises because of the implementation of the Fifth Pay Commission.

The sources said that the Government had identified certain growth engines in each state which could be developed in a big way, thereby generating revenues as well asjobs. The growth engines identified for each state is also to be taken up at the conference.

The sources said that involvement of states in the reforms process was crucial since they are often the executing agencies for several infrastructure, poverty alleviation and health related programmes. It was pointed out that power sector reforms went about in a big way only when during the United Front government's tenure, the Government convened a CMs' conference and devised a Common Minimum Action Plan for Power.