With the Southern States expressing concerns over the Terms of Reference (ToR) of the 15th Finance Commission (FC), Union Finance Minister Arun Jaitley on Tuesday (April 10) said 'FCs use appropriate criteria to assess true needs of the states'.
Today, a crucial meeting of the ministers of the southern states was held in Kerala's capital Thiruvananthapuram to discuss the concerns and views on the Terms of Reference (ToR) of the 15th Finance Commission.
The meeting was organised by Kerala Finance Minister Thomas Isaac in Thiruvananthapuram after the southern states opposed the latest terms of reference (ToR), which they claim will cut their share in revenues while benefiting the Centre with a bigger slice of the pie. "FCs use appropriate criteria to assess true needs of States.
Population proxies very well for the needs of the people in a quantitative sense. Another criterion, the Income Distance, which captures very well relative poverty of people in the States, is used to assess qualitative needs. These two parameters allocate more resources to the populous and poorer States, which need additional funds for providing education, health and other services to the people, which own resources of these poorer States may otherwise not allow," Jaitley wrote in a Facebook post to address the concerns raised by the Southern states.
Talking to reporters, Kerala finance minister T.M. Thomas Isaac had earlier today said the changes in the ToR of the 15th Finance Commission, that would adversely affect the southern states, has not become a debate in the country. "The objective of the conference was to highlight the issue and make it a national agenda for debate", Isaac said. Slamming the Centre, he said the ToR was against the federal co-operative structure of the country. "We will not allow destroying the federal co-operative structure of the nation," he said. The ToR has recommended using the 2011 census to calculate population for allocation of union tax revenue in place of 1971 census,
which was used by previous finance commissions. This would adversely affect the southern states, he said. There was uncertainty over the incentives to be given to states, he said. There were several issues that have to be discussed at the national level. The meeting would be the first step towards that, he said.
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