Changes in terms of Finance Commission, says 5 states’ minsters before meeting President

The Finance Ministers of Delhi, Kerala, West Bengal, Andhra Pradesh, Punjab and the Chief Minister of Puducherry met President Ram Nath Kovind here on Thursday and submitted a memorandum urging amendments to the Terms of Reference (ToR) of the 15th Finance Commission.

The ministers said that the ToR in present form would destroy the financial autonomy of the states.

The southern states had earlier protested that they would lose out because of the Commission’s decision to use the 2011 population census instead of 1971 as a basis for devolution of taxes from the Central government to the states, as they had successfully controlled their population.

Jointly addressing the media here on Thursday after meeting the President, Kerala Finance Minister Thomas Issac said they had requested Kovind to amend the ToR by taking precedents from the past.

“Shifting of population base year from 1971 to 2011 violates the resolutions of the Parliament… We want 1971 as base year for population calculation,” Issac said.

When asked whether the President promised any change, Issac told IANS: “The President did not promise anything. But he will definitely look into it.”

“Terms of reference of the 15th Finance Commission violate the federal principle as enshrined in the Constitution, erode autonomy of states and bring significant financial hardship to all states,” the memorandum said.

Delhi Finance Minister Manish Sisodia alleged that the ToR was made with the thought of “how to overshadow states” and “how to control the financial autonomy of states”.

He said that many aspects of the ToR “destabilise the well-settled federal arrangement” of India.

The Finance Ministers of the southern states of Kerala, Karnataka and Andhra Pradesh, and Puducherry Chief Minister V. Narayanasamy had met on April 10 and decided to submit a joint memorandum to the President.

Later they met in Amaravati in Andhra Pradesh to work on the memorandum.

“Centre asks 15th FC to use 2011 census data instead of 1971 census used so far to determine devolution of taxes. This will further affect the interests of the South. We need to resist,” then Karnataka Chief Minister Siddaramaiah said in a tweet on March 23.

The memorandum contained a list of proposed amendments to the ToR.

Referring to Delhi and Puducherry, Sisodia said: “Since the formation of the Financial Commission, Union Territories with legislation are neither considered as a state or a Union Territory. When money is given by the centre to states, then say you’re a Union Territory and no money is given. When it comes to central government schemes, it is said that money won’t be given like to a Union Territory.”

“We propose that the award of the 15th Finance Commission must apply to Union Territories with legislature, namely, the National Capital Territory (NCT) of Delhi and Union Territory of Puducherry. The Terms of Reference may be amended accordingly,” the memorandum said.