Kerala state seeks more share in tax, funds

Thiruvananthapuram: The state government has asked the 14th Finance Commission to evolve a population-based formula for the devolution of central taxes, enhance the sharable pool of central taxes from 32 to 50 percent and scale up the share of funds to local self-government institutions.

The state has also sought a grant of Rs 1,200 crore for the conservation of Western Ghats.

These demands were part of the official memorandum the state government had handed over to the commission members  who began their two-day visit to the state on Wednesday.

“Devolution needs to be based on the population factor as this is what determines the quantum and nature of expenditure that states have to incur for providing services to its citizens,” Chief Minister Oommen Chandy said.

The state government wants the 1971 census figures to be taken as the base figure. “After 1971, effective birth control measures had  controlled the state’s population,” Finance Minister K.M. Mani said.

“Kerala’s effectiveness should not be held against it while the centre decides on fund transfer,” he added.

Besides, it was felt that the share of population needs to be adjusted for other important factors such as  old age population, urbanisation, effective density and percentage of land area under forests.

Increase in urbanisation and the geriatric population imposes  greater responsibility on the state in terms of services and infrastructure.

“The percentage of land area under forest is an effective measure of not only the ecological management of a given state but also of its economic potential,” the Chief Minister said.

The memorandum has sought an increase in the grants to the LSGs from 2.28 percent to 5 percent of the divisible pool.

“Experience shows that effective decentralisation substantially improves governance and welfare outcomes,” the Chief Minister said.