Southern states' call for fight over 15th Finance Commission gets louder

Thomas Isaac

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. "The PM always says about cooperative federalism but it is actually a dictatorship", he said, adding that the states are suffering as the Centre "is taking away the power of the states".

The forum hosted by Kerala's Left Front government in Thiruvananthapuram also became an occasion to come down heavily on the Union government, which, the leaders claimed, was trying to colour the Finance Commission with its ideology and using it to micromanage the fiscal domain of the state government. His deputy and Finance Minister Panneerselvam seconded him, saying the state's rights will be protected.

Isaac reiterated that the commission's ToR are undemocratic and in conflict with the federal structure.

The Ministers said the Centre arbitrarily prepared the Terms of Reference, alleging a conscious effort to cut the Central share of taxes to the States. "There is no inherent bias or mandate in the ToR of the 15th Finance Commission which can be construed as discriminatory against the states which made good progress in population control", he said.

Interestingly, the finance ministers of Tamil Nadu and Telengana skipped the event.

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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.

The essential worry for the Southern States (and of course West Bengal) is that they may be penalized for their better performance on population control and other social indicators. So far, the census data of 1971 was being used as the crucial parameter, but the 15th Finance Commission headed by NK Singh, used the census of 2011. "The best performing states are penalised while the worst performing are being rewarded". Who are you to dictate us? According to the statistics available with the Centre, the population in south India went up just by 85 per cent, while in the BIMARU states in north India-Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh-had gone up by 144 per cent.

He added that the commission's recommendations are based on an assessment of the needs of the states (based on population) and "Income Distance" (a measure of relative poverty) and that, as a result, more resources go to poorer states "which need additional funds for providing education, health, and other services to the people" which these states might otherwise not be able to provide.

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

"If 2011 is going to be used, Kerala will lose Rs 20,000 crore in five years, while Tamil Nadu stands to lose Rs 40,000 crore", said Issac. Like Tamil Nadu, Telangana's decision to skip the meeting is being viewed as a part of its political strategy.

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