Kerala to hold finance ministers meet to discuss terms in Finance Commission

Kerala Chief Minister Pinarayi Vijayan who inaugurated conclave of finance ministers of southern states

Kerala Chief Minister Pinarayi Vijayan who inaugurated conclave of finance ministers of southern states

Kerala, Karnataka and Andhra Pradesh are anxious that the Finance Commission's proposal to use the 2011 census, instead of the current 1971 census, as the criteria for revenue devolution will disadvantage them as they have implemented population control programmes better than states in the North. States with larger populations get more of the central funds.

Narayansamy, perhaps the forum's most critical voice against the central government, said the centre discriminates against his state, hitting its coffers by appointing separate finance commissions for union territories, even though they are considered like any other states when it comes to Centre-government sponsored programs. He added that the ToR of the 15th commission includes a provision for rewarding with special incentives states that have done well in terms of population control. TN Deputy CM O Paneerselvam, who also holds the finance portfolio, skipped the meeting.

Puducherry Chief Minister was the most vocal against the centre and said that the conference would be an eye-opener for the union government.

Kerala Finance Minister Thomas Isaac claimed that the terms of reference of the 15th Finance Commission were a threat to the federal system, adding that a deliberate attempt was being made to cut down tax devolution to states and forcibly impose conditions on them. The terms of reference are determined in a way that neutralize the freedom of the commission.

"We are fighting for the interest of Tamil Nadu as well".

Andhra Pradesh Finance Minister Yanamala Ramakrishnudu, Karnataka Agriculture Minister Krishna Byre Gowda and Puducherry Chief Minister V Narayanaswamy are expected to participate in the meeting. "Every state will be allowed to present their case and, at the end of the day, there could well be a joint communique", said Issac.

"The fault for allowing this encroachment lies partly with the successive Finance Commissions, which abdicated their constitutional responsibilities and limited their roles, on their own, presumably in tune with the wishes of the central government".

Karnataka said the current TOR punishes the progressive states and rewards the under-performers.

"Bringing down the rate of growth of population does not mean less expenditure for states". Who are you to dictate us? Now the 2011 census will be taken, and if that happens, Kerala - as well as a few south Indian states - would be the worst affected as our population growth was just 56 per cent as compared to 150 per cent in certain states in the country. He further said that the states ruled by the Bharatiya Janata Party, including Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh, will gain from this move. Tamil Nadu, being one of the major contributing states with regard to tax and other benefits like power supply from NLC, will lose its rights.

Earlier, he had said the centre has "lit a fire" and that it should be doused before the southern "flames scorch the federation".

If the 2011 census is considered, Kerala will have to face a loss of at least Rs 20,000 crore in the coming 5 years.

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