THIRUVANANTHAPURAM: The chairman of fifth State Finance Commission, Dr B.A. Prakash, has said that finance minister T.M. Thomas Isaac had lost the right to hold the office of the minister after delaying the implementation of the Commission’s recommendations by two years. He called this a serious lapse, and termed it unjustified and unconstitutional. Dr Prakash was responding to the finance minister’s statement in the Assembly recently that the delay in implementation of the SFC recommendations was prompted by the need for close monitoring.
The economist also demanded that the state government should initiate an inquiry into the reasons that led to the delay in the implementation of the report. Further, he said the government’s rejection of the SFC's proposal to streamline maintenance fund grants smacked of corruption and nepotism. The state opposed two crucial reforms on devolution put forward by the 5th SFC. One, the SFC wanted the state to decide the fund transfer to local bodies for a particular fiscal on the basis of the state’s own revenues for that fiscal. The state rejected the measure saying that it will stick to the existing practice of fixing the devolution to local self-government institutions for a particular fiscal on the basis of the state’s own tax revenue (SOTR) mobilised two fiscals back.
Two, the SFC wanted all the three types of funds to the local bodies — general purpose fund, maintenance grant and development funds — to be transferred as a share of the SOTR. The state has refused to grant development funds in this fashion, it wants these funds linked to state plan outlay, which will be 50 per cent lower than the SOTR. “The arguments trotted out to reject the SFC recommendations are illogical,” Dr Prakash said. “The government seems to have forgotten that the Commission is duty-bound to transfer a part of the state’s revenue to the local bodies,” he added. Dr Prakash said that the irony was that Dr Isaac who had earlier said that Commission was trying to destroy local bodies had now allocated 19 per cent less for local bodies than what the Commission had recommended.
