Finance Ministers Conclave: Memorandum to wait

Thiruvananthapuram: The Conclave of Finance Ministers against the terms of reference of the 15th Finance Commission has failed to finalise a memorandum to be presented to the President. The original plan was to finalise the memorandum at Amaravati on May 7 and present it to the President before the Commission begins its visit to states during the last week of May. Now, the memorandum will be presented only in June, when the third conclave takes place   in New Delhi.

The official version is that a draft memorandum will be drawn up in a week after consultations with the chief ministers of the states. Fact is, a draft memorandum was already prepared after the Thiruvananthapuram Conclave, and was generally agreed upon even by the new participants. “But we also need to factor in the views of Punjab, West Bengal and Delhi before we finalise the memorandum,” a top finance fepartment official said.

Besides the three South Indian states (Andhra Pradesh, Karnataka, and Kerala) and one union territory (Puducherry) that took part in the first Conclave, the Amaravati Conclave on May 7 had the participation of two North Indian states (West Bengal and Punjab), and the Union Territory New Delhi.  Another reason for the delay in firming up the memorandum is the backchannel efforts already on to rope in more states, especially Mizoram, Meghalaya, Odisha and Sikkim that will potentially be the worst-affected by the 15th FC’s terms of reference.

“At least 12 to 13 states will be adversely affected by the ToR. So, if more states could be roped in, the memorandum would carry more weight,” the official said.
 According to the state Public Expenditure Review Committee member R Mohan, the the ToR set for the 15th FC is uncalled for.

“The existing system, based on the 1971 population census, is functioning smoothly. Already the less-developed states in the North were making the gains,” he said. Kerala, for instance, was getting just 2.5 percent of the devolution. Uttar Pradesh, on the other hand, was getting 19.5 percent of the allocation, and Bihar 9 percent. “This is a political gambit. They might even use the 2011 census to even take the total number of Lok Sabha seats for UP to 100, and Kerala’s to somewhere around 14,” Mr Mohan said.