Hyderabad: Andhra Pradesh CM Chandrababu Naidu took strong opposition to the Terms of Reference (ToR) of the 15th Finance Commission saying the states that have successfully controlled population growth and are “progressive states” should not lose out on central funds.
Naidu was hosting a Conclave of Finance Ministers on Monday, deliberating upon the impact of the Terms of Reference of the 15th Finance Commission. A memorandum from this meeting will be submitted to President Ram Nath Kovind, urging him to reframe the ToR in order to “prevent a federal imbalance of the country”.
Naidu also demanded that the Centre respect the cooperative federal system.
"It is not right to penalise states that are in the forefront in population control. We will not tolerate this injustice. We will fight till justice is secured," he asserted.
Andhra Finance Minister Yanamala Ramakrishnudu, too, presented his analysis of the ToR and said, “Firstly, the 14th Finance Commission, introduced idea of using the population data from census 2011 for the first time in a small way by giving it a weightage of 10% while arriving at the formula for devolution of the divisible tax pool. This adversely affected fund flow to states which have implemented the family planning program in earnest.”
He added, “The use of population from Census 2011 by 15th FC with a greater weight for determining the allocation of funds to the states would cause great injustice to the States. This approach would penalise states which have shown declining fertility rates and lower population growth over the past four decades.”
Naidu on his part pointed out that Kerala was leading all states in population control while Andhra Pradesh too has adopted firm measures to reduce population growth rate.
"But now, population control is not our policy. Our ultimate objective is poverty eradication and we have accordingly been implementing various schemes," Naidu noted.
He also apprehended that south Indian states would lose seats (in legislatures) if delimitation of constituencies was undertaken based on 2011 population.
"South Indian states are under the threat of losing their eminence because they were successful in population control. It is not right for the Centre to penalise such states," Naidu maintained.
Ramakrishnudu added, “We are all aware about the division of the powers of taxation and borrowings between the Centre and states. The states can rarely match their resources with the development needs. The states incur capital expenditure. The use of 2011 Census population figure would result in reduction of the share of majority of the states. If devolution gets reduced, it is bound to increase fiscal and revenue deficits of states.”
Puducherry Chief Minister, V Narayanaswamy on the other hand, urged that the ToR should include provisions for union territories too.
Delhi Deputy CM Manish Sisodia said that the 15th Finance Commission will only lead to a centralised path to development. He expressed his support and agreement with the cause of the conclave and said that he looks forward to participate in drafting the memorandum.
Amit Mitra, Finance Minister of West Bengal said that resistance to the 15th Finance Commission is vital as the ToR are in violation of fundamental constitutional values.
He said, “States are facing massive revenue deficits.” “I also want to highlight the issue of non-payment of funds by the Centre. West Bengal has not received ₹9,958 crore while we are forced to borrow from the market to keep our government initiatives running. We need to resist this forced cap on the states’ ability to borrow.”
“These terms of reference are a part of the whole idea of undermining the federal structure and to my knowledge, other Chief Ministers too have written to Prime Minister Narendra Modi regarding their concerns about the 15th Finance Commission”, said Mitra.
The Telugu Desam Party (TDP) chief said, “The Terms of Reference of the 15th Finance Commission almost penalises states for being progressive and well-performing. States that are good at population control will be in debt.”
Naidu continued, “South Indian states, in particular, who have been reportedly good at population control, will be affected. The few seats that South Indian MPs have in the parliament will soon not be ours. The little voice we have, will soon go away.”
Referring to post-bifurcation problems, he added that Andhra Pradesh has been subjected to unjust behaviour from the Centre for a long time. “But we have still managed to address the need of gas, electricity, water and LED bulbs on our own.”
“Poorly performing states must be uplifted, but not at the cost of progressive states. A new paradigm for devolution must be established in the spirit of partnership between Centre and States, and not based on dominance of the former over the latter.”
Quoting the Fiscal Responsibility and Budget Management Act, he said, “The central government is borrowing a lot of money. But they are not allowing us to. How is this fair? The 15th FC has been asked to determine whether the states are controlling the expenditure on populist measures. The obvious question that arises is why should the Centre too not be assessed through the same lens? We must stand up and prevent the significant hardship that states will face is the 15th FC will be put in place. The ToR weaken the very cause of cooperative federalism.”
He added, “India will prosper only if all the states prosper. The Finance Commission has to see that in the absence of adequate financial resources, efforts of poverty alleviation take a beating, preventing the poor to rise economically.”
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