THIRUVANANTHAPURAM: The 15th Finance Commission chairman Mr N.K. Singh said that the terms of reference of the Commission was not against any state. “The states that have performed well too will get their due share when resources are divided on the basis of the 2011 census,” Mr Singh told reporters after meeting the Chief Minister, ministers and other senior officials here on Tuesday. Mr Singh also said that the terms of reference were not chosen by the Commission but given to it.
The chairman’s statement was also a clear hint that the Commission intends to go ahead with the 2011 population census data for its work. The state's biggest objection was against the 15th FC's adoption of 2011 census as the basis for fund devolution. The State wants the FC to persist with the 1971 census. The concern is the state's success in controlling population will be used to deprive the state of its rightful share.
“The Commission functions on the foundations of equality, justice and logic,” Mr Singh said. According to him, the substantial part of the state’s revenue being used up for salaries and pension should be the biggest worry for the state’s economic system. Chief Minister Pinarayi Vijayan, while presenting the state's memorandum to the FC chairman, said that the state should get an increased share of the Central devolution as it was spending heavily on improving social infrastructure.
The Chief Minister also urged the Commission to unify the grants transferred by the Centre to the states. Finance Minister Dr T.M. Thomas Isaac said that the Commission should ensure that progressive states continue to enjoy the benefits bestowed earlier and also that states that had done commendably to control population were not deprived of their rightful share. Finance principal secretary Mr Manoj Joshi elaborated on the state’s memorandum. Besides the objection to the 2011 census, the memorandum emphasized four points.
One, if the clause in the ToR that the grant of revenue deficit grants will be reconsidered is implemented then it will affect the captial expenditure of the state. Two, the share of divisible pool of central taxes to be transferred to the states should be raised from 42 to 50 percent. Three, the commission should refrain from compressing the fiscal deficit to 1.7 percent of the GDP. Four, special grants should be sanctioned for coastal development, relief for rubber farmers, forest protection, and for the rehabilitation of Gulf returnees.
